Local governments are expected to generate new sources of revenue to raise domestic resources to fund development programmes in the coming months.

This comes after their target was increased by Rwf7 billion in this financial year to Rwf60 billion from Rwf53 billion collected last year.

Local government revenue is collected from various channels such as taxes and fees.

The increment was announced recently during the signing of performance contracts by local government officials.

According to Minister of Local Government Francis Kaboneka, the target will be realised through the assistance of the Rwanda Revenue Authority.

As a result, local district officials are now drafting new fees and commissions including property taxes, new charges on leasing of wetland plots and rent on unutilised properties.

“We hope to achieve the targeted revenues through an increase of the tax base. There are some charges that were not applicable on different services that we will now be keen on,” said Bonavanture Uwamahororo, the Nyamagabe district mayor.

However, local authorities say the recent weather shocks undermined their performance and implementation of the signed contracts.

Recently, parliament passed a new property tax that introduces a new tax rate on land at Rwf300 per square metre from between Rwf30 and Rwf80 previously.

Undeveloped parcels of land will be subject to an additional tax of 100 per cent of the new tax rate.

The new draft law determines the size of a standard plot of 300 square metres to be 20 metres in length and 15 metres wide. The tax will increase by 50 per cent for each extra square metre of a standard plot.

The district council determines the tax rate on a square metre of land based on criteria and standard rates set by a Ministerial Order.

However, if a taxpayer owns less than two hectares of land and uses it for agriculture, livestock or forestry, it is exempted from tax.