Revenue authority decries tax fraud

The increasing number of forged documents used to evade taxes is posing a great challenge to the effective operations of the country’s tax body, senior official at Rwanda Revenue Authority (RRA) has said. The vice poses a serious threat to the existence of the business community and loss of government revenue as competition stiffens with regional integration.

The increasing number of forged documents used to evade taxes is posing a great challenge to the effective operations of the country’s tax body, senior official at Rwanda Revenue Authority (RRA) has said.

The vice poses a serious threat to the existence of the business community and loss of government revenue as competition stiffens with regional integration.

The issue of tax fraud was raised by RRA last week, during a meeting with members from the Private Sector.
Specifically, RRA is continuously discovering forged trade documents such as Certificate of Origin and invoices declared at customs. Presented at customs, the certificate of origin confirms the country of origin of the specified goods.

“We have had experiences of sugar coming in from none EAC and none COMESA countries but obtaining certificates of origin,” Ben Kagarama, the Deputy Commissioner for large Taxpayers told Business Times in a recent interview.

Kagarama also mentioned that there is a common illegal practice of not issuing Value Added Tax (VAT) invoices regularly. 

“When you buy an item as a consumer and ask for a VAT invoice - they (traders) will tell you if you want a VAT invoice you will pay more. It is a practice that we have agreed to fight very strongly – non issuance is a terrible practice that violates the law,” he added.

Falsification of accounting statements has also been rampant among the business community though Kagarama said in the bad practice that is now decreasing.

“I should say this practice is changing because taxpayers have had a right to appeal- they can even go beyond to the commercial courts but some of them have lost cases and that has been “good education,” for them,” he said.

To mitigate loss of government revenue through fraud, Karagama added that RRA has intensified enforcement measures including carrying out thorough investigations to identify the source of fraud.  

He also mentioned that RRA would continue to engage in discussion with the business community to increase voluntary compliance.

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