Officials at Rwanda Revenue Authority (RRA) are confronted with a taxing task to recover Rwf204 billion in outstanding taxes, some of which are up to 10 years-old.
The officials from the tax body told the Public Accounts Committee (PAC) on Tuesday, September 22, that the challenges they face in recovering the arrears include people who are reluctant to meet their fiscal obligations, and those who registered their assets in other people’s names in an attempt to evade tax.
They were during the public hearing held virtually, responding to management irregularities identified in the tax collection body by the Auditor General’s 2018/2019 report.
The report exposed huge amount in unrecovered tax arrears which increased by 40 percent from Rwf161 billion in 2017 to Rwf270 billion in 2019, indicating that 87 per cent of them were older than 12 months.
These tax arrears, the Auditor General showed, represent 20 per cent of total government revenue collected by RRA for the financial year ended 30 June 2019.
RRA Commissioner General, Pascal Bizimana Ruganintwali said that the Authority has so far recovered Rwf66 billion since the audit report was submitted to Parliament in May 2020, meaning that the outstanding amount is Rwf204 billion.
Government, gold entities owe most of the taxes
Ruganintwali said that a large part of the taxes in question is owed to the tax body by the government (entities), and different companies trading in gold.
"The government owes us about Rwf90 billion in tax arrears, which is about a third of the total. We wrote letters to [the treasury] requesting that we get paid, and suggest that the entities in question be allocated a budget intended for that.
"There are also Rwf78 billion outstanding taxes owed by gold trade companies,” he said.
Write-off likely for some cases
However, Ruganintwali expressed concern that among the people who owe the taxes, some have died, others became bankrupt, while others left the country.
He said that the tax law requires that such situations be documented to prove the death, insolvency or the fact that the person is no longer in the country.
"Once such evidence has been produced, it will be taken to the Board [of RRA] to consider write-off,” he said.
He said that RRA sent a report to the Rwanda Investigation Bureau (RIB) so that they help them find the people they could not trace to ensure they pay.
"There are some people for whom we do not have tracks and we consider them tax dodgers. We confiscated their properties; we are doing our best to recoup the taxes, but it is a tough task,” he said.
RRA said that it has already identified assets worth Rwf13 billion belonging to these debtors, saying that it can either auction them, or their owners will be inclined to pay them in order to redeem their property.
"I suggest that RRA officials submit to parliamentary record copies of the letters that it wrote requesting institutions to settle tax arrears so that we make advocacy for them,” said MP Marie Alice Kayumba Uwera.
PAC Chairperson, Valens Muhakwa told RRA leaders that they should make and submit a detailed report to the Committee on such tax arrears and indicate those people who have a tendency to default them.