Surprises are in store for many business persons out there who have made it an art to evade taxes. Rwanda Revenue Authority (RRA) is one organisation that has improved year in year out. Every year, it exceeds its tax collection targets, but smart businessmen always manage to skip the dragnet. When the Electronic Billing Machines were introduced, many businesses did not take it seriously. They would always negotiate with the customer to forego the necessity of a Value Added Tax (VAT) receipt. It was a win-win situation for both parties- until RRA spoiled the party by instituting heavy penalties. Every business that had a turnover of at least Rwf 20 million was supposed to register for VAT. So, foxy business people came up with new ploys; they broke up their businesses into many smaller entities to stay under the Rwf 20 million radar. A lot of untaxed monies are always going under the bridge undetected and RRA is always on the lookout to see how to plug the loopholes. Now it has done just that. It has introduced new categories of who register for VAT, and many small businesses are in for a rude awakening. But RRA should not just slam the new law bang! Without some sort of explanation; it works in the interest of the people and should not be regarded as a cruel uncaring body that will leave no stone unturned as it seeks to meet its tax targets. Many people understand the importance of paying taxes as long as they don’t feel they are victims of “enforced” taxation. RRA should be seen as a partner by businesses, not an enemy out to ruin them. Those kinds of perceptions are caused by the approach of the tax body. It should change it through effective communication and sensitization campaigns.
