Rwanda Revenue Authority yesterday said that the set deadline of March 31st for all VAT registered businesses obligated by law to procure, install and use Electronic Billing Machines in their operations will not change.
Instead, enforcing the regulations is scheduled to follow the deadline immediately.
This was among the key messages that the Commissioner General of the revenue body passed across during a press briefing in Kigali on March 20th, when less than two weeks remained on the deadline.
“We believe that we have accorded enough time to the business community to procure the machines and install them in their respective premises. Therefore, we have no intentions to postpone the set deadline any further,” Mr. Richard Tusabe, the Commissioner General of RRA shared.
RRA’s determination to implement the terms of the law governing VAT payment in the country which now requires all taxpayers concerned to use the e-billers comes at a time when the numbers of local businesses which have taken heed of the obligation remains insignificant at 32 percent.
Only about 2400 businesses out of the targeted 7500 are said to have acquired the e-billers while days to the deadline are nigh.
But the revenue body says it cannot continue to hold off and postpone deadlines any longer as the delay in acquisition is considered as negligence from the business community.
“If we continue holding on to implement the law, extending deadline after another, we will be allowing non compliant taxpayers to flourish at the cost of good compliant ones. We are ready to enforce the law and ensure that all taxpayers obligated to use the machines actually do,” Tusabe said.
The deadline for acquiring EBMs was extended before, from the former end December 2013 to March 31st 2014. RRA noted that the move was done following request from business operators represented by the Private Sector Federation (PSF).
In the past, the business community has tabled high prices of the machines as the major hindrance to something that the revenue body said has been tackled to ensure that the machines available on the market are of the best quality and price.
According to RRA, the machines are a latest technology and therefore costly but measures to ensure that the prices come down have been taken and results are self evident.
From two certified suppliers in late 2013, the number has been surged to seven allowing competition in the process to the benefit of businesses that get better pricing.
“The market price of the machines has significantly dropped from about Rwf500,000 last year to the current close to 350,000,” Tusabe offered. There are slight variations in pricing based on the supplier.
To further make the investment in the machines less burdening to businesses, RRA allowed companies to consider the machines cost as an operational expense when declaring their taxes. The move will allow the cost of the machine to be relatively recovered through cutting down on the tax contribution by almost the same value as the EBMs’ price.
Equally in the spirit of facilitating businesses put in place the required system of e-billing without burdening operations, RRA has had negotiations with those who had special challenges to adopting the machines and in the process solutions convenient to either sides have emerged.
Beneficiaries to such undertakings included large taxpayers who claimed to have management systems in place and thus found it unnecessary to overhaul them and purchase EBMs.
In addressing the problem, RRA and the parties involved have developed interfaces between the institutions’ systems and the result has been putting in place means for particular companies’ systems to communicate directly with RRA. This is the fundamental outcome that the EBMs seek.
Institutions including telecommunication companies and other big taxpayers have benefited largely in the process.
Similarly, the RRA boss noted that his institution is ready and willing to work with any company that needs special attention and is optimistic that a working solution can be identified.
For instance, about 700 taxpayers requested and have been exempted after thorough study of their dossiers from using EBMs.
“We benefit most if none of the businesses is penalized as indicated by law, that is why we want them to come to us and we amicably find solutions to their challenges in comprehending to what the regulation requires,” Drocella Mukashyaka, the Deputy Commissioner General in charge of taxpayer services at RRA undernoted.
Underpinning the reason as to why EBMs are viewed as revolutionary in the administration and management of tax regulations in Rwanda is the machines’ ability to communicate with the tax governing body in real time.
Hence as the revenue boss confided on the sidelines of the press briefing, solving the evasion of Value Added Tax will simultaneously address the malpractice in general.
“When someone swindles VAT, chances are high that they will evade all other taxes. Therefore correcting the former eventually is a milestone in fighting all kinds of tax evasion,” Mr. Tusabe noted.
Meanwhile RRA is making efforts to establish systems that will help it manage the administration of taxes that were formerly managed and collected by district authorities.
The body was recently nominated by government to take over the duty of collecting these taxes.
Among others, the revenue organ is moving steadily to establish the required regulations which will govern the management of these taxes.
Important to note is that, while RRA will take over the collection of taxes formerly gathered by district authorities, the management of this revenue will continue to be carried out by the same local authorities as in the past.
All that RRA will do is leveraging on its well established ICT systems to swiftly collect the taxes which include Trading License (Patante), tax on immovable property and taxes on house rent.
Also as the March 31st deadline closes in for all VAT registered taxpayers to acquire Electronic Billing Machines, it is imperative to note that the same date serves as deadline for the declaration of all taxes in Rwanda.