The former head of the Burundi Revenue Authority spoke with PETERSON THIONG’O about the challenges he faced while building the country’s first tax authority, and how Bujumbura can enhance collections and maintain growth.

---------------------------------------------------------------------

You were at the helm of the Burundi Revenue Authority for four years. What challenges did you face in your efforts to reform the authority?

The government was stepping up its fight against corruption and the biggest challenge we faced was recruiting new staff. We needed only 425 staff, but received 9,000 applications.

We had to fight corruption at the interview level because it was the norm to have a few unqualified individuals favoured at the expense of qualified ones. We ensured that the test did not leak, and we shortlisted the 750 top performers from whom we selected the 425.

Apart from that, did you meet any opposition from corrupt individuals or networks?

People tried to interfere with the process right from the recruitment stage, but we had to stop them. It was one of the largest transparent recruitment that Burundi has ever witnessed and we believe it was fair.

We started by segregating micro, large and medium taxpayers. With 340 medium and large taxpayers, it was easy to achieve compliance. Best tax practices show that 90 per cent of tax should come from within the country. 

The last IMF report we received indicates that we are getting 100 per cent compliance from large taxpayers and 83 per cent from medium taxpayers.

What have you changed at the authority?

We have improved compliance, dismantled cartels and widened the tax base. Businesses want to thrive in a predictable and stable environment. Businesses do not want to incur losses due to corruption or inadequate tax collection systems.

If they know a tax is this much and there is no corruption within the revenue authority, they gain confidence and comply without being pushed.

Is there anything you feel you should have accomplished but failed to?

Having a computerised tax system is top on the list. The system, would have made filing tax returns easier. The manual system currently in use is not only slow but open to abuse.

What can Burundi do to increase revenue?

The country needs to eliminate tax exemptions. In my estimate, it loses as much as 4 per cent of GDP every year due to these exemptions. But tax breaks are not really what investors look for when choosing where to put their money.

They are more interested in the ability of local institutions to protect investments, the size of the market, and the available talent pool.

In the East African Monetary Union Protocol, EAC countries have a mandate to raise their tax ratio to GDP to 25 per cent. Burundi’s is way behind compared with its counterparts; can this be implemented in the next decade?

It is possible, but governments need to make difficult tax choices apart from revenue collection. Burundi’s ratio stands at 13.5 per cent. The country gives four per cent in tax exemptions according to our figures.

The country needs up to get up to 20 per cent of GDP in order to meet the Millennium Development Goals, and the 25 per cent requirement for the region’s monetary union. Governments need to make the right policy choices to get to that level.

What role did you play in Rwanda?

I worked in Rwanda for eight years on contract under TradeMark East Africa. I was advising the Commissioner General and also worked as an analyst.

When I arrived there in 2002, the country was collecting Rwf79 billion ($118 million), which grew tenfold to Rwf795 billion ($1.2 billion) by 2013. If Burundi follows in the footsteps of Rwanda, the country’s revenue could hit BIF3 trillion ($2 billion) by 2032.