THE East African revenue bodies have raised concerned over increased tax evasion among the member states, warning that violators will be subjected to huge fines.
Meeting last week at Serena Hotel, Kigali, revenue leaders sounded bitterly, saying tax supports a broad range of state services and dodging it reduces the revenue available to fund important services.
“Tax evasion hurts all of us by reducing the amount of money available for these essential services and it must be addressed for the common good of the region,” Charles Lwanga Gakwaya said on Thursday.
Gakwaya is a director of planning and research at Rwanda Revenue Authority (RRA).
He said sales tax is a major source of revenue for many developing cities and counties, which depend on the income for infrastructure development among other requirements.
As a measure to stamp out the vice, Gakwaya said that the East African revenue bodies had agreed on sharing useful information regarding traders who either under declare products at boarder posts.
He explained that information sharing would help bodies to know exactly the types of goods and their values imported by traders through other countries.
He added that the move would help them in monitoring goods like spirits, cigarettes and jewelry which are prone to tax invasion.
“Usually when importers bring these commodities, they tend to undervalue and under declare them. In the end these goods fetch low taxes and the importers get abnormal profits through exploitation of the consumers,” Gakwaya explained.
“As tax bodies, our aim is not penalising the tax payers but we are just interested in facilitating trade in our respective countries,” he added.
The bodies’ meeting is also aimed at making possible the heads of revenue authorities in the region to share ideas on best practices in tax administration and deliberate on corporate strategies for enhancing trade facilitation and increased investments in the region.