Effect of Electronic Tax Management System of Tax Collection in Rwanda: Case Study of Rwanda Revenue Authority (RRA)

Abstract

The research aimed to examine the effects of electronic tax Management system on revenue collection by Rwanda Revenue Authority because Revenue collection was low and tax administration weak and this was believed to be due to manual system of tax administration characterized by low tax collection, delays and poor record keeping, this made Rwanda revenue authority to meet their targeted budgets. This research had three specific objectives namely; to analyze the effect of internet payment system on tax collection in Rwanda; to examine the effect of mobile payment system on tax collection in Rwanda and to examine the effect of electronic billing machine on tax collection in Rwanda. The researcher reviewed both and empirical literature on the effect of electronic Tax management system on revenue collection. The researcher used descriptive method of study based on qualitative and quantitative approach in order to get better analysis of the study. The population size was 120 and sample taken is 75 respondents. Both primary and secondary sources with their relevant tools like questionnaire and documentary analysis in order to come up with required data. In the findings it was established that both electronic tax management system which consist of Tax Payment System, Mobile Tax Payment System and electronic Billing Machine System contributes to timely tax payment and reduced operational cost for both RRA staffs and clients. The system has also made clients pay tax from any business location, has made communication collaboration between tax payers easier, has made tax auditing/accountability easier and lastly has increased Revenue collection. Table 4.14 gave the relationship between Electronic Tax Management System and Effectiveness of Revenue collection in Rwanda whereby the respondents N is 75 and the significant level is 0.01, the results indicate that independent variable has positive high correlation to dependent variable equal to .850^** and the p-value is .000 which is less than 0.01. When p-value is less than significant level, therefore researchers conclude that variables are correlated and null hypothesis is rejected and remains with alternative hypothesis. This means that there is a significant relationship between Electronic Tax Management System and Effectiveness of Revenue collection in Rwanda. We can therefore conclude that Electronic Tax Management System contribute positively to Revenue collection in Rwanda.