Case Studies
Case Study: How Rwanda’s Compliance Improvement Plan Boosted VAT Rewards Participation
Deep dive into Rwanda’s strategy to raise voluntary tax compliance via VAT Rewards, enforcement and taxpayer registration.
By NomadicTax Research Team • 5-8 min read • September 3, 2026
## Background: Rwanda's Revenue Turnover and VAT Rewards
In FY2025/26 Rwanda’s central government taxes collected Frw 3,956.4 billion—104.2 % of target—with local revenues also exceeding expectations. Key among the policies strengthening compliance was expansion of both VAT base and VAT Rewards Schemes. ([rra.gov.rw](https://www.rra.gov.rw/fr/translate-to-french-details?cHash=76e087f775578d1eebd86408c502fbbc&tx_news_pi1%5Baction%5D=detail&tx_news_pi1%5Bcontroller%5D=News&tx_news_pi1%5Bnews%5D=3043&utm_source=openai))
VAT Rewards—where consumers request EBM receipts and stand to benefit from prize or cash incentives—grew massively from about **75,000 participants** in mid-2025 to over **1,096,900 by end-June 2026**, generating Frw 105.8 billion in taxable sales and Frw 4.2 billion in rewards disbursed. Counter-fraud actions helped suppress illicit VAT claims worth Frw 28 billion. ([rra.gov.rw](https://www.rra.gov.rw/fr/translate-to-french-details?cHash=76e087f775578d1eebd86408c502fbbc&tx_news_pi1%5Baction%5D=detail&tx_news_pi1%5Bcontroller%5D=News&tx_news_pi1%5Bnews%5D=3043&utm_source=openai))
## Key Components of the Compliance Improvement Plan (CIP)
- **Widening registration**: Over 126,000 new taxpayers registered, bringing in Frw 15.4 billion additional revenue.
- **Enforcement of arrears**: Domestic tax arrears of Frw 277.1 billion were collected through increased audits and risk-based interventions.
- **Use of Technology**: Expansion of EBM usage and data analytics to detecting fraud and fictitious invoices. ([rra.gov.rw](https://www.rra.gov.rw/fr/translate-to-french-details?cHash=76e087f775578d1eebd86408c502fbbc&tx_news_pi1%5Baction%5D=detail&tx_news_pi1%5Bcontroller%5D=News&tx_news_pi1%5Bnews%5D=3043&utm_source=openai))
## Outcomes and Lessons
- Higher VAT base: proportion of vatable sales rose from about 52.3 % to 59.2 %.
- Public engagement: large increase in reward scheme participation, raising consumer awareness and incentivising compliance.
- Targeted audits and sector prioritization: manufacturing, transport, professional services were emphasized.
## Takeaways for Other Jurisdictions & Businesses
- Incentive programmes like VAT Rewards can drive consumer behaviour, boost formalization, and traceability.
- Administrative reforms—EBM, digital systems, data analytics—can meaningfully enhance compliance and fairness.
- Transparency in targets and performance builds trust: Rwanda’s disclosure of achievements (revenue figures, base expansion etc.) supported buy-in.
## Practical Advice for Businesses & Policymakers
- If you're operating in a country with similar VAT Reward schemes: ensure POS or billing machines can issue compliant electronic invoices and encourage clients to request them.
- For governments: set measurable targets, ensure digital tools are robust, consider broadcasting enforcement statistics transparently.
**Example:** A small café in Kigali adopted EBM and issued receipts to patrons; one lucky consumer got a reward under the VAT Rewards scheme, boosting visibility. The café saw more customers asking for invoices, indirectly increasing its VAT exposure—but also legitimacy and cleaner operations.