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HomeBusinessThe public expenses grew up to 86%, Burundi Revenue Authority reports

The public expenses grew up to 86%, Burundi Revenue Authority reports

Taxes collection consistently rose year by year. Burundi Revenue Authority raised more revenue each year than forecast, reaching 86% in 2019 up from 62,65% in a decade.

The Burundi Revenue Authority’s (OBR in French acronym) overall national tax to public finance performance jumped from 62.65% in 2009, its first year, to 86% in the 2018-2019 fiscal year that is in a ten year period, according to available figures.

 It implies that since 2009 OBR has been able to collect annual revenues in excess of its projections, as said by Fiacre Muhimpundu the spokesperson of the entity.

The authority was created to better serve taxpayers and improve tax and customs revenue collection for the Treasury as well as all other tax and customs administrations.

Its creation is also a reform that is in line with Burundi’s economic integration policy within the East African Community (EAC)..

Established by Law No. 1/11 of July 14, 2009, the OBR operates as a state-owned, self-regulating public revenue authority. It was founded with the overarching goal of addressing poverty alleviation via enhanced tax revenue and facilitating an effective business environment in Burundi.

With its vision to function as a modern tax administration contributing to the development of Burundi and its integration into the regional and global economy, it is an institution created to usher in an era of modern and professional tax and customs administration in Burundi

“Ever since the OBR’s launch, annual revenues have been climbing year after year” said Fiacre Muhimpundu, spokesperson of the entity. Adding that the office has always collected more revenue than expected each year, except in 2015 and 2019.

As of 2015, the drop in revenue was due to the socio-political crisis in Burundi led by a failed coup the late Pierre Nkurunziza over the contested third term.

Muhimpundu said that revenue growth resumed in 2016 through June 2019. Since July of that year, tax payment have dropped as the government implemented the new law governing the fiscal year that should start in July, he added.

The OBR was then required to report from July to December 2019. But in the period of July 2019 to July 2020, the revenue has increased significantly to more than 1 144,16 billion BIF.

More than 1,000 billion BIF collected in 2019”, said Muhimpundu.

The drivers of the surge in revenue were three-pronged, according to Muhimpundu. First, the dissemination of OBR offices throughout the country to reach a significant number of taxpayers.

“They are also equipped with enough tools to reach target customers in their localities for revenue collection”, he said

Secondly, adding Fiacre the synergy of institutions in the awareness of taxpayers in the fight against fraud and smuggling. Moreover, the government is following the lead of the OBR by involving the administration and the justice and security forces in the fight against fraud.

Finally, taxpayers are increasingly involved in development projects, including the creation of businesses and cooperatives that, in turn, pay taxes, he concluded.

As for the OBR’s input to government budget expenses, Fiacre Muhimpundu reported that it stood at 62% in 2009, 76% in 2012, 75% in 2015, and 86% in 2018-2019.

The Office collected over 1,000 billion FBu in the fiscal year 2020-2021, a 108.47% rate weighed to the forecast of 1,054.8 billion BIF.

In meantime as of 2009, it collected 362.76 billion BIF in revenue, he said.

In spite of the fact that the OBR succeeds in obtaining revenues, it also faces a number of limitations. This includes the limited financing provided by the state.  Furthermore, there is the lack of human resources and equipment, especially the hardware.

Another challenge is the still very low level of tax compliance..

To address these setbacks, Muhimpundu says that increased government support is needed. The review of tax laws should also be done but also ensure their instability.

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