Abstract: Taxation is the main source of government revenues in Rwanda. Rwanda’s tax revenues have been increasing rapidly due to the country's rapid economic development; therefore, Government has invested time and money in an integrated online tax filing system for tax administration to improve the efficiency of its tax system. Government started massive tax reforms from the year 2002 through tax modernization programme, tax rates adjustment and modification of tax penalties in its efforts to create a sustainable tax system that could harness adequate tax revenue to finance public expenditures. However, tax revenue collection from large tax payers has been increasing at a decreasing rate. The purpose of this study was to determine the effects of tax audit on revenue collection in Rwanda. The study is limited to the Headquarter of the Rwanda Revenue Authority in Kigali. This study adopted a descriptive approach. Data sources that was used was secondary data from Rwanda Revenue Authority reports. Data collected was analyzed through SPSS version 21. Data analysis involved statistical computations for averages, percentages, and correlation and regression analysis. Ordinary least squares (OLS) regression method of analysis was adopted to determine the inferential statistics. The findings revealed that holding Tax administration, tax revenue performance, revenue protection system, tax automation to a constant zero, revenue collection would be at 0.347. A unit increase on Tax administration would lead to increase in revenue collection by a factor of 0.162, a unit increase in revenue protection system would lead to increase in revenue collection by a factor of 0.194 and unit increase in tax automation would lead to increase in revenue collection by a factor of 0.211. Tax audit actually has an effect to revenue collection as according to the ANOVA analysis and model analysis on the four variables on tax audit with reference to revenue collection. This clearly indicates that tax audit increases revenue collection. That in essence means that the more the tax audit conducted the more revenue is collected. Thus, it is right to say that tax audit is directly related to revenue collection. The study recommends that there is need for a study on how the size of a company influences the auditing as there is variation for various organizations based on the size.
Keywords: Tax Administration, Tax audit, Rwanda Revenue Authority, Revenue collection, Revenue performance
Title: EFFECT OF TAX AUDIT ON REVENUE COLLECTION IN RWANDA
Author: NYABIRANDE Blaise, Harelimana Jean Bosco
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
Research Publish Journals
