EDITORIAL: Efficient tax system will help deliver on RRA targets

Despite an increase of Rwf140.7 billion in the 2017/18 Budget compared to the Budget for the current fiscal year that ends June 30, the Government has taken a decision not to impose additional taxes.

Despite an increase of Rwf140.7 billion in the 2017/18 Budget compared to the Budget for the current fiscal year that ends June 30, the Government has taken a decision not to impose additional taxes.

Instead, revenue collection measures will be tightened to plug loopholes in revenue collection, especially tax evasion.

 

Rwanda Revenue Authority (RRA) says this will significantly contribute to the Rwf2 trillion national budget that will be domestically financed at 66 per cent, up from 62 per cent currently.

 

Although this looks like an ambitious shot, the tax body has the potential to meet the objective. It only requires aggressiveness and regular sensitisation to ensure that there is no room for tax evasion.

 

This will require concerted efforts among the key stakeholders, like law enforcement agencies, the business community, local leaders and the general public.

The tax collection regime should be strictly enforced smuggling routes closely monitored to ensure that notorious smugglers don’t evade taxes. Through smuggling, government loses a lot of revenue in taxes.

There is need for more sensitisation efforts and insistence on the use of Electronic Billing Machines (EBMs). The recent campaign on the promotion of use of EBMs has been a success and should be a regular undertaking.

Going forward, RRA needs to apply a combination of measures in enforcing compliance. One is to continue sensitising the public to insist on being issued EBM receipts after a transaction and taking punitive measures against those found evading taxes.

However, at the end of the day, it is the duty of every Rwandan to appreciate that paying taxes is a civic duty and that it is a noble cause as it contributes to national development.

Some of the tax evaders do it deliberately while others may simply be ignorant of the critical role taxes play in the economic growth and transformation of their own businesses, at least in the long term.

The net should be cast wide to ensure that there is no loophole left for tax evaders to exploit the system.

If all tax evasion loopholes are closed, there is no doubt that RRA will collect the projected revenue in the forthcoming financial year and possibly even surpass the target.

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