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A Rwanda Revenue Authority's employee closes down a shop of one trader who is reported to have defaulted taxes worth more than Rwf2 million in Kigali. Sam Ngendahimana.
Rwanda Revenue Authority (RRA), yesterday, started a countrywide operation to curb misuse of Electronic Billing Machines (EBMs).
The operation started in Kigali city.
According to RRA officials who were part of the exercise, the goal is twofold; recovery of money lost through the misuse of the system and to educate the business community on the use of the gadgets.
The crackdown started in downtown Kigali and Nyabugogo - two of the busiest commercial hubs in the city.
RRA had previously identified 11 businesses which had been fined for not using the EBMs. Some were temporarily closed after they failed to pay the fine, while others continued their operations without using the machines.
“It [crack-down] is going to be a continuous activity that will reach other parts of the country. We are temporarily closing down those that have defaulted many times and they will be allowed to open after 30 days,” Vianney Butera, the EBM Field Operations Manager told The New Times. However, he added that there was room for leniency.
“Businesses that admit their faults and agree to change their ways of operations can even open before the 30-day period,” Butera added.
During the morning crackdown, one business that was closed is said to have defaulted taxes worth more than Rwf2 million and had received warnings on many occasions. The owners were reluctant to talk to the media.
Butera highlighted that most businesses default taxes through undervaluing the price or quantity of goods or services, while others choose not to issue electronic invoices to customers after they have sold goods.
“Some refuse to give EBM receipts when they have sold goods, and others undervalue VAT charged on certain items,” he noted.
The VAT law stipulates that any person required to use an EBM who sells goods or services without issuing an electronic invoice is liable to an administrative fine of 10 times the value of the evaded VAT.
For repeat offenders, the punishment is doubled to an administrative fine of 20 times the value of the evaded VAT.
There are no clear estimates indicating the amount of money lost through the misuse of EBMs, but RRA said that the cost of not paying taxes was high for the country.
A study, released in April this year, indicated that the use of EBMs was found to have contributed up to 6 per cent increase of year-on-year tax revenue since the launch of the electronic system.
Approximately Rwf352.4 billion was collected in VAT last year.
According to RRA, around 20,000 EBMs have so far been distributed and they are now in the process of rolling out an upgraded version.
Emmy Mbera, the Coordinator of EBM Project at RRA, pointed out that, so far, 3,000 businesses have signed up for the upgraded version.
editorial@newtimes.co.rw
The operation started in Kigali city.
According to RRA officials who were part of the exercise, the goal is twofold; recovery of money lost through the misuse of the system and to educate the business community on the use of the gadgets.
The crackdown started in downtown Kigali and Nyabugogo - two of the busiest commercial hubs in the city.
RRA had previously identified 11 businesses which had been fined for not using the EBMs. Some were temporarily closed after they failed to pay the fine, while others continued their operations without using the machines.
“It [crack-down] is going to be a continuous activity that will reach other parts of the country. We are temporarily closing down those that have defaulted many times and they will be allowed to open after 30 days,” Vianney Butera, the EBM Field Operations Manager told The New Times. However, he added that there was room for leniency.
“Businesses that admit their faults and agree to change their ways of operations can even open before the 30-day period,” Butera added.
During the morning crackdown, one business that was closed is said to have defaulted taxes worth more than Rwf2 million and had received warnings on many occasions. The owners were reluctant to talk to the media.
Butera highlighted that most businesses default taxes through undervaluing the price or quantity of goods or services, while others choose not to issue electronic invoices to customers after they have sold goods.
“Some refuse to give EBM receipts when they have sold goods, and others undervalue VAT charged on certain items,” he noted.
The VAT law stipulates that any person required to use an EBM who sells goods or services without issuing an electronic invoice is liable to an administrative fine of 10 times the value of the evaded VAT.
For repeat offenders, the punishment is doubled to an administrative fine of 20 times the value of the evaded VAT.
There are no clear estimates indicating the amount of money lost through the misuse of EBMs, but RRA said that the cost of not paying taxes was high for the country.
A study, released in April this year, indicated that the use of EBMs was found to have contributed up to 6 per cent increase of year-on-year tax revenue since the launch of the electronic system.
Approximately Rwf352.4 billion was collected in VAT last year.
According to RRA, around 20,000 EBMs have so far been distributed and they are now in the process of rolling out an upgraded version.
Emmy Mbera, the Coordinator of EBM Project at RRA, pointed out that, so far, 3,000 businesses have signed up for the upgraded version.
editorial@newtimes.co.rw
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