The Rwanda Revenue Authority (RRA) is set to rollout devices that will facilitate taxpayers to declare their tax returns and pay taxes through the Internet to boost fiscal revenues and curb rampant tax fraud.
Ben Kagarama, the commissioner General of RRA last week said that the methods to be rolled out include Licensed Electronic Sales Devices, which show the amount of tax a trader has to pay for every transaction.
Another one is the use of online methods of tax payment, where traders can declare their tax returns and pay taxes through the Internet. Both projects are set to be in use by the end of June.
The systems are expected to lift more businesses from the informal sector as RRA would be able to monitor the growth of firms.
“Back office support and machines are all in place and we shall selectively distribute the first 500 machines to the different economic sectors free of charge,” Kagarama told the business times.
Samuel Toyota, RRA’s Director of ICT, said that traders currently provide handwritten invoices adding that some taxpayers exploit their loopholes to evade taxes through understating sales and overstating purchases.
RRA has already spent US$300, 000 (Rwf179 million) on purchasing the devices with plans to spend US$200,000 (Rwf119 million) more.
Taxpayers will acquire the devices at a between US$200 and US$300.
Rwanda will become the third country in EAC to deploy the systems after Kenya and Tanzania.
It is expected that the online methods of tax payment will improve VAT collections and enable RRA to reduce paperwork usage, reduce tax collection costs while traders would be able to file tax returns do the payment online.
“These devices have been introduced but it will not be easy for the daily business person to just buy it,” said Mr. Gerald Mukubu, the director of advocacy at the Private Sector Federation (PSF).
He called on RRA to properly educate the public on the use and importance of the upcoming system of tax payment.