In a bid to enforce high tax compliance levels and crack down on tax evasion, Rwanda Revenue Authority (RRA) has vowed to expose the names of companies and individuals who have failed to honour their obligation to pay taxes.
During the announcement of tax collections for the first quarter of the 2009/10 fiscal year, the tax body revealed its intentions to crack the whip on tax defaulters as non-compliance remains one of its biggest challenges.
“Yes, we are aware of people who evade tax, some have been caught on some occasions, but unfortunately we cannot share the names with you today, but in the near future, we will,” said RRA Commissioner General, Mary Baine.
She noted that RRA has been using ‘friendly approaches’ where they visit companies, carry out sensitisation campaigns on tax compliance, as well as trying to bring taxpayers closer to the tax administration, but where it hasn’t worked, the alternative will be prosecution and attaching property.
She said that where the friendly gesture fails, the body will apply enforcement by writing letters to inform defaulters of its intention to attach property and blocking their bank accounts.
It was noted that despite telecom companies leading the way in paying the highest taxes, they take advantage of the exemptions and allowances given by RRA for investments purposes to pay less tax compared to their real turnover.
According to Ben Kagarama, the Deputy Commissioner in charge of large taxpayers, the service sector leads in tax contributions with telecom companies and hotels being the largest contributors followed by industry/manufacturing, construction and retail trade respectively.
Baine added that challenges still remain in regard to tax evasion due to smuggling activities and under-declaration of the value of goods and service as well as taxpayers keeping double tax records and using forged documents.
“Tax compliance still remains a major problem, some taxpayers engage in forgery while others choose to declare less what is supposed to be taxed, this does not only undermine our work but also has a direct impact on the economic progress of the country,” Baine said.
She cited small and medium taxpayers as the less compliant ones while large taxpayers are the most compliant.
Between January 2008 and July 2009, the body recorded more than Rwf 8.3 bn in evaded duties and taxes on vehicle registration.
However, it managed to impose fines and penalties amounting to Rwf 7.4bn between Jan 2008 and July 2009, recovering about 70 percent of the amount.
“We recently dismissed 3 of our workers who deliberately or unsuspectingly cleared merchandise on the Rubavu border that was supposed to be maize but it was later discovered to be iron sheets, not maize,” she said.