Rwanda gears to E-filing, e-payment to boost economy

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Rwanda Revenue Authority (RRA) has called on the business community to start registering with the new technology tax declaration (e-filing and e-payment) ahead of the registration deadline set for May 1st, 2013.

Rwanda Revenue Authority has also announced plans of a countrywide training for traders on the new system, which will begin in May to enable the business community to usage of electronic tax payment platforms, a move aimed at easing the process of tax collection.

The month long campaign will be conducted in collaboration with the Private Sector Federation (PSF) and will be geared towards helping traders become familiar with automated tax payment which is a new phenomenon in the economy.

“Many merchants face skills barriers in the use of newly launched automated systems. PSF is therefore planning to provide training and workshops to improve their knowledge, as well as enable the efficient recovery of taxes,” Alex Ntale, Director of ICT Chamber in PSF said.

“The training and workshops will target business owners in all spheres of the economy particularly Small and Medium Enterprises (SMES) projects.”

One of the traders, Damascene Gakuba says that the new system is good for business transactions. But the capacity for all businesspersons to access it and later use it remains a challenge”.

“We have realised the importance of paying taxes. That RRA is bringing its services to our door steps is great news for of us. We don’t need to default anymore,” he said.

RRA rolled out electronic platforms last year to facilitate taxpayers to declare returns as well as pay taxes through the internet to boost fiscal revenues and curb rampant tax fraud. However, their use has been singled out as a challenge to SMEs, which are more familiar with paperwork such as handwritten invoices.

E-filing and e-taxation was introduced by RRA in 2012. It offers an option to the clients to file taxes like VAT, PAYE, Excise duty and Withholding taxes electronically on RRA’s website without having to visit an RRA premise.

However, e-filing is supposed to be complimented by e-payment system such that a taxpayer, after declaring taxes online, he can as well pay online…such that he/she doesn’t have to go to the bank to queue for payment

Apparently, Rwanda heavily depends on taxpayers’ money; however this time around, Rwanda will profoundly have to depend on taxation since the country is dealing with shocks of donor communities suspending their funds to the national budget support.

In 2012, RRA introduced a new tax regime for small and medium en­terprises in which business that make annual profit of Rwf2-4 million and between Rwf4-7 million now pay flat tax rates of Rwf60,000 and Rwf120,000 per annum re­spectively.

The revenue authority has set its eyes on making at least Rwf641.2 billion in the financial year 2012/13 from tax revenues.  In the meantime, the electronic filing system has resolved a number of loopholes and fil­ing of tax return made simpler, the tax body is experiencing an improve­ment in tax compliance and efficiency.

At least Rwf 318 billion was collected during the first half of the fiscal year that ended December 2012—an estimated 15.6% increase in the revenue collected during the same period of the previous year, which has registered growth in the economy by at least 8% in the last decade.

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About the author

Based in New York, Patrick is a Wall Street Broker and Financial Pundit. He works as a Foreign Consultant for Rwanda Eye. His insights on the current economic trends and its impact on Rwanda and Africa, makes him an invaluable asset to Rwanda Eye.

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