Rwanda's National Budget for 2025/26: Significant Increase and Focus on Domestic Revenue

Strategic Insights -

Rwanda has set its national budget for the fiscal year 2025/26 at Rwf 7,032.5 billion, marking a 20.9% increase from the revised budget of Rwf 5,816.4 billion for 2024/25. The budget underlines the country's growing fiscal independence, with domestic revenue projected to contribute Rwf 4,105.2 billion, accounting for approximately 58% of the total budget. Tax revenue remains the primary engine of domestic financing, forecast at Rwf 3,628 billion, an increase of Rwf 677.6 billion over the previous fiscal year.

Key Takeaways:

  • The national budget for 2025/26 is set at Rwf 7,032.5 billion, reflecting a significant increase of 20.9% compared to the revised budget for 2024/25.
  • Domestic revenue is projected to contribute Rwf 4,105.2 billion, accounting for approximately 58% of the total budget.
  • Tax revenue is forecast at Rwf 3,628 billion, an increase of Rwf 677.6 billion over the previous fiscal year, driven by Rwanda's expanding economy, continued reform efforts, and the implementation of new tax policy measures.
  • Non-tax revenues are projected at Rwf 477.2 billion, derived largely from administrative fees, charges, and proceeds from various government services.
  • External resources will complement domestic efforts, with grants projected at Rwf 585.2 billion and loans at Rwf 2,151.9 billion.
  • The Rwanda Revenue Authority (RRA) will implement several strategic measures to meet domestic revenue targets, including intensified audits, risk assessments, and digital platforms such as e-filing, electronic billing machines (EBM), and real-time data reporting to simplify compliance and close loopholes.
  • RRA will continue its efforts to formalize the informal sector, which currently accounts for approximately 80% of the economy, to broaden the tax base and ensure that all economically active businesses contribute fairly to national development.
  • The budget emphasizes partnership, where taxpayers contribute responsibly while the state delivers improved services, infrastructure, and economic opportunity.
  • The government's approach emphasizes the importance of tax compliance, with non-compliance met with stricter penalties, which can go as high as 70% of the principal tax due for certain offenses.

Statistics:

  • Total budget for 2025/26: Rwf 7,032.5 billion
  • Domestic revenue contribution: approximately 58%
  • Tax revenue forecast: Rwf 3,628 billion
  • Increase in tax revenue: Rwf 677.6 billion
  • Non-tax revenues: Rwf 477.2 billion
  • Grants: Rwf 585.2 billion
  • Loans: Rwf 2,151.9 billion
  • Informal sector contribution to the economy: approximately 80%

Sources:

  • "Rwanda's National Budget for 2025/26" [no publication date]
  • Rwanda Revenue Authority (RRA) [no publication date]
  • Ministry of Finance, Government of Rwanda [no publication date]