Rwanda has advanced its commitment to global tax transparency, achieving notable results in the Phase 1 Peer Review Report released by the Global Forum on Transparency and Exchange of Information for Tax Purposes. The review assessed Rwanda’s legal and regulatory framework for the Exchange of Information on Request (EOIR) standard and highlighted Rwanda’s alignment with international transparency requirements.
This positive assessment is critical for KIFC’s positioning as a leading financial services hub in Africa as it strengthens its credibility as a trusted, transparent, and reliable financial jurisdiction.
For investors, businesses, and global partners, the outcome delivers three key benefits that reinforce Rwanda’s position as a competitive financial hub:
- Trust and Global Competitiveness: The Global Forum’s recognition enhances Rwanda’s reputation in the international financial ecosystem. For KIFC, this reinforces its appeal as a preferred financial hub for companies seeking stability, transparency, and compliance with global standards.
- Facilitating Investment and Partnerships: By aligning with international transparency standards, Rwanda creates an environment where trust and accountability drive investments, enabling businesses to operate in a clear, well-regulated framework.
- Enhanced International cooperation with foreign tax administrations: the Rwanda Revenue Authority’s capabilities in taxing cross-border incomes of tax residents operating outside Rwanda will be enhanced through EOIR with 171 other Global Forum member countries, hence widening the tax base and reducing the tax burden on the locally registered investors.
The Phase 1 Peer Review examined Rwanda’s policies and legal systems for ensuring transparency in tax-related information. Rwanda scored highly, achieving a full compliance rating for 8 out of 9 indicators assessed, including the availability of ownership and identity information, availability of accounting information, access to information, rights and safeguards, EOIR Mechanisms, Network of EOIR mechanisms, confidentiality, and availability of banking information which was found to need further improvement.
Rwanda joined the Global Forum on Transparency and Exchange of Information for Tax Purposes in 2017, signalling its commitment to adhere to two critical international standards:
- Exchange of Information on Request (EOIR): A process that ensures tax authorities can access and exchange information upon request for the administration and enforcement of tax laws.
- Automatic Exchange of Information (AEOI): The systematic exchange of financial account information between countries to prevent tax evasion. Rwanda has committed to implementing AEOI by January 2025.
The Global Forum, which consists of over 171 member jurisdictions, conducts rigorous peer reviews to monitor and evaluate compliance with these standards. The reviews are designed to promote transparency and fairness in the global tax system by ensuring that countries can exchange relevant information to combat tax avoidance and illicit financial flows effectively.
Next Steps: Phase 2 Review
While the Phase 1 review assessed Rwanda’s legal and regulatory readiness, the Phase 2 review, scheduled by 2027 at the latest, will evaluate the practical implementation of the EOIR framework. This will assess Rwanda’s ability to exchange information effectively and in a timely manner with its international partners.
For more details, access the full report here: https://www.oecd.org/content/dam/oecd/en/publications/reports/2024/11/global-forum-on-transparency-and-exchange-of-information-for-tax-purposes-rwanda-2024-second-round-phase-1_a9e6e46c/0adbbbb5-en.pdf
