11 January 2013

Rwanda: Revenue Body to Tighten Noose On Tax Evaders

The days of tax evaders will soon be over after the Rwanda Revenue Authority (RRA) unveiled an electronic system that will record transactions of any given enterprise and service provider.

The figures entered into one's account will automatically be transferred to the tax body database, making it hard for fraudsters to alter the records thereafter

The system will, besides helping curb tax evasion, also assist businesses to keep clean books of accounts, Celestin Bubakare, the commissioner for domestic taxes, said.

Bumbakare said that the plans to install the system were ready, adding that they were only waiting for the value added tax (VAT) law to be passed to start implementing the project.

"We expect the law to be passed soon and we shall immediately start executing the project since we have already acquired all the necessary machines," he said.

The special devices would be installed at the premises of VAT-registered businesses, where they will help the traders and service providers issue RRA certified receipts to customers.

"The electronic sales device has two components; a certified invoicing system and a sales data controller," Bumbakare explained.

He further said the project would be rolled out in phases. "In the first phase, we will handle all the businesses that pay VAT and, eventually, expand the project to cover all the businesses across the country.

Bumbakare revealed that over 5,000 businesses are VAT-registered, but noted that about 30per cent of them evade taxes. This, he noted, affects the management of tax collection in the country.

Florence Ndoli, the proprietor of Ndoli Joint Supermarket at Kisementi in Remera, Kigali, welcomed the move, saying it would improve service delivery.

"It's a good idea. It will ease pressure on traders, especially when one has to write receipts for many customers," she said.

Bumbakare explained that with the new system, all the products are registered and given codes. "If one wants to buy a certain product, the accountant will just enter its code in the sales machine, which will then print out the receipt and record the transaction," he said.

The figures entered in one's account will automatically be transferred to the tax body database, making it hard for fraudsters to alter the records thereafter, he added.

The technology has been successfully used in many countries, including Ethiopia, Kenya, Tanzania Sweden, Greece and other 50 countries around the world.

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