RRA warns of hefty penalties that await property tax defaulters

As part of Rwanda Revenue Authority’s efforts to ensure compliance in property tax registration, declaration and payment, authorities have warned of heavy fines against tax defaulters. File.

As part of Rwanda Revenue Authority’s efforts to ensure compliance in property tax registration, declaration and payment, authorities have warned of heavy fines against tax defaulters.

The warning follows an extension of the deadline for declaration and payment for property tax to January 31, 2020.

Tax registration and declaration are resultant to a 2018 law determining the sources of revenue and property of decentralized entities.

Business times caught up with Ernest Karasira, the Deputy Commissioner for region and centralised tax, who gave insights into the procedures, processes for paying property taxes as well as consequences awaiting defaulters.

Below are the excerpts:

What’s the scope of property tax?

Property tax is paid for immovable properties such as houses, land and land parcels.

Tax payers were supposed to pay taxes for the year 2019 by December.

However, at the end of December, considering the number of those who were supposed to have registered and declared property taxes, we realised that the number was still low and that is why we extended the deadline since the issue had not mainly been caused by them.

However, there are other taxes such as rental income tax that is declared and paid for the year of 2019 and trading license paid for the year of 2020 that are always paid in January.

What are the steps in declaring and paying these taxes?

There are steps that must be followed in declaring and paying all of these three types of taxes-property tax, rental income and trading license.

The first step is to register to pay the tax.

After registering, the system sends an SMS to taxpayer’s mobile number showing them their Tax Identification Number and password.

The next step is to declare and pay. During this time, taxpayers can use our website, RRA.GOV.RW. Under the “pay district revenues” tab as well as “Taxes” there is a provision to enter one’s Tax Identification Number and password to make declarations.

All taxes one is registered for can be found on the site and the system automatically calculates the tax you have to pay.

The system creates a declaration form which one can use for payment.

This document shows RRA reference number which is key and can be used to pay taxes via various mediums including bank, mobile money, MOBICASH and online banking among others.

Once a paying is made upon the reference number, a confirmation message is received within 5 minutes or so.

How can a Rwandan abroad declare and pay taxes?

Those who are abroad and have TIN number and password can declare and pay from anywhere as long as they can access RRA website.  

What of people with limited digital skills, how do they get to navigate the system?

They can visit the nearest RRA offices in different sectors where they receive assistance on the process. Alternatively they can visit Cyber Cafes since we have trained them on supporting taxpayers.

What is the progress in paying?

For now, when you consider the population or the total of taxpayers that were supposed to submit their declaration, there is quite a number of eligible tax payers yet to comply.

Some have registered, declared and filed but have not paid. The latest figures show that those who paid were less than 50 per cent in regards to property tax, rental income tax and trade licensing.

May be this week, the number is likely to go up. We are urging all people to fast-track the payment. We will even call them on mobile phones to remind them so that they respect the deadline. Otherwise, they face penalties.

What are the consequences of not complying with the deadline?

Those who do not abide by the deadline are in two categories.

The first one is “late payers”: These are those who declared on time but didn’t pay property tax on time. These ones pay fines equaling to 10 per cent of total amount of taxes they owed. And if they continue to delay, they pay additional fines of 1.5 per cent every month.

However, that 10 per cent is not applied every month and never exceeds Rwf100, 000 despite whatever amount of taxes.

The second category are “non-filers”: Those didn’t declare on time and, of course, didn’t pay taxes. For this category, besides the fines mentioned above (10 per cent, 1.5 per cent), they also pay an additional fine of 40 per cent of taxes that they were eligible to pay.

What would you say are the broad impacts of tax defaulting?

The consequences are many. The decentralised taxes are considered in district performance contracts and action plan.

If people do not pay taxes on time, we miss our target as RRA and implementation of many projects in the country can be affected.

 Second, taxpayers face heavy fines which affect their personal development.

What is your target in terms of district revenue and what was the performance last year?

In 2018/2019, we collected Rwf60.6 billion in district revenues against the target of Rwf60.1 billion. In 2019/2020, we are looking to collect Rwf67.8 billion.


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