H.E. Dr FranÃ§ois Xavier Ngarambe, Ambassador of Rwanda in France have signed the Convention on Mutual Administrative Assistance in Tax Matters (MAAC), developed by the Council of Europe in 1988.
In doing so, Rwanda becomes the 23rd African country to sign the MAAC, joining 141 other countries, including all G20 countries, the so-called BRIICS, almost all OECD countries, major financial centres and a growing number of developing countries.
Since 2009, the G20 has worked towards expanding the number of signatories to the MAAC, particularly including non-OECD and non-Council of Europe member states, to ensure that developing countries can reap the rewards of the increasingly transparent global tax environment. In recent years, the MAAC has become renowned for being the leading international treaty for multilateral cooperation in tax matters.
The MAAC signing represents an important national milestone for Rwanda and the newly-created Kigali International Financial Centre (KIFC) which is positioning Rwanda as a preferred financial jurisdiction for investments into Africa. The treaty ensures that Rwanda complies with international standards from the EU and OECD, and it will enable Rwanda to expand her network of information exchange partners from the present 12 to more than 141.
Furthermore, the signing demonstrates Rwandaâs commitment to implementing the international standards on transparency and exchange of information for tax purposes and to securing the benefits of the new cooperative tax environment. The convention is expected to reinforce the transparency of KIFC and its ecosystem of international investors, financial service providers, private equity funds and fund managers.
Cooperation in tax matters plays an integral role in combating tax evasion and avoidance, along with curbing illicit financial flows (IFFs) and providing confidence to international investors. Rwanda is at the next stage of implementing international standards for transparency and exchange of information for tax purposes, and the MAAC signing is another important step towards having the highest regulatory standards of transparency and achieving a largely compliant rating at Rwandaâs peer review scheduled for 2023.
Domestically, Rwanda is also establishing a comprehensive legal and regulatory framework for regional and international investors and has passed several new pieces of legislation, such as the law governing mutual legal assistance in criminal matters which will further increase transparency and exchange of information. These efforts will enable investors to consolidate their African investments in a safe, fully compliant and transparent jurisdiction underpinned by the rule of law and serviced by Rwandaâs fast-growing, high-quality financial services sector.
Nick Barigye, CEO of Rwanda Finance Limited (RFL), the agency mandated to promote the Centre said:
âThe historic signing of the OECDâs Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAAC) marks an important milestone for Rwanda’s financial sector and the Kigali International Financial Centre (KIFC).â
âThis is imperative in the positioning of KIFC as one of the leading financial centres in Africa, as the signing helps to improve our compliance rating, integrity, and transparency of our institutions. We are confident this will help Rwanda secure the benefits of the new cooperative tax environment.â
âThis milestone shows how much we have achieved in Rwanda in a short space of time and is yet another example of how we are continuing to transition the country into one of the continentâs leading financial centres.â
âTo ensure that the MAAC is ratified and entered into force, Rwanda will move to the next steps of completing our required domestic procedures, before depositing the instrument of ratification, acceptance or approval. Everyone involved is committed to ensuring a speedy ratification process that will see the Convention entered into force as quickly as possible.â
H.E. Dr FranÃ§ois Xavier Ngarambe, Ambassador of Rwanda in France stated:
âThis signing is a landmark moment for Rwanda as we continue our journey toward the establishment of Kigali as an international financial centre, a jurisdiction that adheres to the highest levels of international standards with respect to compliance and transparency.
âIt will allow Rwanda to play a major global role in combatting tax avoidance and evasion and underlines Rwandaâs long-standing commitments on these matters. The Government of Rwanda has been working with the OECD on these issues for a number of years and this signing is the culmination of that work.â
âOn behalf of the Government of Rwanda, I congratulate all those who have worked so hard to get to this stage, in Kigali and across the world. Rwanda continues to go from strength to strength and this historic signing is a reminder of the scale of our ambition and our determination to work with all global partners to ensure the success for Rwandaâ.