The race by districts to maximise revenue collection has led to a hike in taxation rates, user charges and other forms of non-tax fees.

Residents are complaining that the cost of some services went up, further contributing to the high cost of living.

Most districts set higher revenue collection targets in their performance contracts this year, putting pressure on officials to increase money collected on local public services in their respective jurisdictions.

As a result, non-tax charges, fees, and fines were increased in some districts while others sought to widen the tax base by adding in more people as well as introducing fees on previously untaxed areas.

“The districts are milking money from everything possible especially through unnecessary penalties. Private individuals involved in local markets taxation are not sparing any commodity which is why many things are expensive,” said Jean Damascene Nzambaza of Gicumbi district.

Apart from market fees, the fees on cleaning and security services, land leases, authorisations to burn charcoal and construction materials as well as transport of materials from quarries and forests also went up.

Many service providers have since hiked the prices citing the high penalties and tax increase.

This cost is eventually passed on to the residents. “We can’t explain how a truck of stones now cost Rwf53,000 from Rwf41,000 last year when they are sourced from our neighbourhood,” said a resident of Shyorongi, a rural Rulindo district sector with many quarries.

Besides local tax revenues, districts get a huge portion from local non-tax charges.

Respective district councils have the leeway to set and adjust non-tax charges, fees and fines related to the provision or use of particular local public services provided the rates remain within the range set by the presidential order establishing the fees and charges levied by decentralised entities.

The thresholds for market fees range between Rwf1,000 and Rwf10,000 per stall depending on location of the market.

Thresholds are also set for land lease charges, parking fees and others collected by decentralised entities.

Although some districts did not change their taxation rates and instead sought to attract the funds through mobilisation to spur increased compliance and expansion of the tax database, others used the leeway to boost own revenues in the new fiscal year.

Most rural districts target to raise between Rwf200 million and Rwf320 million every quarter to be able to hit their targets which range between Rwf800 million and Rwf2 billion.

However, district officials in Gicumbi, Rulindo, Ngororero and Huye, among others where the issue has been cited, said the hike was not aimed at burdening the residents.

“We have had to revisit the classification of our trading centres to capture people who never paid fees before or had lower thresholds, and in so doing, the district council took into account residents’ living standards. So we don’t think it hurts anyone,” said Juvénal Mudaheranwa, Mayor of Gicumbi.

Mr Mudaheranwa said besides the tax hike, the district seeks to fill all the loopholes that residents use to avoid remitting dues especially land lease charges.