Rwanda Revenue Authority (RRA) has introduced new electronic billing machines (EBMs) with the aim of further improving value-added tax (VAT) collection.
Speaking during the unveiling of the new EBM system at RRA headquarters on Wednesday, Aimable Kayigi, the commissioner for Domestic Tax at RRA, said the upgraded EBM version offers a range of benefits to its users, such as allowing them to track transactions and stock levels at any point in time.
“Because a taxpayer knows the exact situation of their purchases and sales, filing of VAT will be much more efficient,” he explained.
The new system is provided by the Korea International Cooperation Agency (KOICA) and Korea Trade Network (KTNET). The system is computer-based unlike the previous one which consists of specific hardware.
Kayigi said the new version is currently used by a few taxpayers as a pilot phase, and has already led to an increase of 21% in VAT.
The new system also saves taxpayers’ time since both their sales and purchases are reconciled, meaning that at the time of filing taxes, the tax payers will just print out their VAT declarations, which saves time and is more accurate.
South Korean ambassador Kim Eung-joong said the project is important in the realization of goals of the government.
“It gives taxpayers a better grasp of their inventory. We thereby invite more businesses to embrace it,” he said.
Since the introduction of EBM in 2013, VAT collection has increased from Rwf 110.5bn in 2013 to Rwf 220.2bn in 2017. VAT payable has increased by 99.34% since the inception of the first version of EBM.