RRA suffers Rwf1.5bn monthly losses in VAT evasion

Rwanda Revenue Authority (RRA) incurs an estimated monthly loss of Rwf1.5 billion due to the large-scale evasion of value-added-tax (VAT) through under-declaration of sold comedies, the Commissioner for Domestic Taxes, Celestin Bumbakare, has said.
RRA head offices in Kimihurura (File photo)
RRA head offices in Kimihurura (File photo)

Rwanda Revenue Authority (RRA) incurs an estimated monthly loss of Rwf1.5 billion due to the large-scale evasion of value-added-tax (VAT) through under-declaration of sold comedies, the Commissioner for Domestic Taxes, Celestin Bumbakare, has said.

“Some upcountry retailers said that they were not given invoices. And when they asked for them the wholesalers told them to buy merchandise from elsewhere,” Bubakare told Business Times Thursday, disclosing that he had just returned from an upcountry tour that unveiled large scale evasion of VAT charges by wholesalers.

He revealed that RRA’s recent clampdown on businesses involved in this tax malpractice has so far unearthed 30 culprits.

For the past three days, RRA officials have been conducting a rigorous investigation in a bid to combat VAT evasion.

During the crackdown on Thursday, Business Times witnessed six RRA officials without badges, disguised as ordinary people commencing weeding out the culprits in Matteus, Kigali’s busiest wholesale trade area.

One of the cases witnessed was of a wholesale trader one Theophile Mukandayambaje who had not invoiced some of the commodities sold to Manase Nshimiyimana, a retailer hailing from Karongi district. 

Mukandayambaje said that that it was an error that was not recorded in the books of account.

“The first time we wrote them but when he came back to get things that he had forgotten, we somehow forgot to write them down,” he said.

RRA says the crack down has also been done in Nyacyonga road leading to Byumba, Murinde and Kugiti Cyinyoni.
Bumbakare said that the exercise would continue until proper invoicing of commodities by the traders is achieved.

“We shall continue until we notice that the process of invoicing is being done properly,” he said.

VAT, which is 18 percent deduction of goods sold, was introduced in 2001. It replaced the sales tax.

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