MPs want banks to stop charging fees on tax deposits

The Commissioner General of RRA, Pascal Ruganintwali (L) appears before the senate yesterday along with NISR director-general Yusuf Murangwa (right) yesterday. Emmanuel Kwizera

If you don’t have an account in local banks and you are trying to pay your taxes through Rwanda Revenue Authority (RRA) bank account chances are that you will be asked to pay some extra fees.

For instance, Bank of Kigali charges Rwf500 while I&M Bank charges Rwf1,000, according to taxpayers who spoke to The New Times.

Senators Thursday called for an immediate end to the practice where commercial banks charge fees in order to allow individuals and micro businesses to pay taxes.

They made the call while meeting officials from RRA as part of the on-going assessment of the factors behind accounting and performance flaws in different government institutions as indicated by several reports of the Auditor General (AG).

While RRA is credited largely having clean books of account, the body was urged to eliminate the constraints that make it difficult to successfully collect taxes.

One of the constraints, the MPs said, is a fee charged by banks to many taxpayers trying to deposit their taxes whenever they don’t own a personal account in the banks from where they are trying to pay their taxes on RRA accounts.

Senator Evariste Bizimana said the fees are unfair because the revenue collection body already has accounts with the banks and the latter should just facilitate payments.

“It is injustice because a taxpayer is depositing money on an RRA account in that bank and they shouldn’t be asked whether they have a bank account in that bank,” he said, urging RRA officials to immediately stop the practice.

Senator Jacquéline Muhongayire, the chairperson of the senatorial Standing Committee on Economic Development and Finance, which is leading the ongoing discussions on the AG reports, said that the fees charged by banks to taxpayers can be discouraging.

“I noticed that people don’t like paying this charge,” she said, urging the tax collection body to ensure the practice stops.

“What interest does RRA have in this money being charged to taxpayers? ” she asked.

Auditor General Obadiah Biraro said that RRA should find a way of paying banks for collection service itself.

“Since they are serving you, why don’t you pay something?” he asked, advising the revenue body to pay the banks.

The Commissioner General of RRA, Pascal Ruganintwali, assured the MPs that the body will work to resolve the issue even as banks still insist that it’s a lot of work to collect the fees.

“We will talk to banks to ensure that they don’t have to charge this fee,” he told the legislators.

RRA has become increasingly efficient in its collection of taxes and it collected Rwf1,252.6 billion in tax revenue during the last fiscal year 2017/2018, surpassing its Rwf1,215.2-billion target by Rwf37.4 billion.

For the current fiscal year 2018/19, the Government expects that money collected from domestic taxes will be up over 13 per cent in comparison with the previous fiscal year as it is expected to be Rwf1,369.4 billion and will go towards funding a Rwf2.4-trillion national budget.

The tax collection body has targeted to collect Rwf60.2 billion from local governments during the current fiscal year.