A new version of the Electronic Billing Machine (EBM), launched by the Rwanda Revenue Authority, will ease tracking of transactions both on the part of the tax body and taxpayers, officials have said.
The upgraded version of EBM comes with supply chain management capabilities that allow different EBM machine devices within one’s business to communicate to each other, allowing both RRA and the taxpayer to track both sales data and stock levels.
The EBM system is a computer based system unlike the old one which is more of hardware. The version is in use on a pilot basis on a few taxpayers and has already led to an increase of 21 per cent on VAT payable.
The system was made possible thanks to support from Korea International Cooperation Agency (KOICA), and Korea Trade Network (KTNET).
Speaking at the launch of the system, in Kigali, on Wednesday, Aimable Kayigi, the Commissioner for Domestic Tax at RRA, said that, despite the old version’s impressive performance in VAT collection, it had some challenges such as lack of communication between devices used by one taxpayer and devices along the supply chain.
He stressed that the new version removes that challenge.
“The upgraded EBM version offers a range of benefits to its users; it allows them to track transactions and stock levels at any point in time. Because a taxpayer has a true position of their purchases and sales, it means at the time of filing VAT it will be easier,” he said, adding that it will help RRA by removing room for maneuvers in the declarations of VAT.
With the new version, RRA will also not only be monitoring people’s business transactions but their stock movement as well.
“Technically, this means that the moment all businesses enroll into this new version of EBM, once commodities are imported in Rwanda, RRA shall be able to track all the stock and transaction – because right from customs, we can see where the stock is going – up to the last purchase,” RRA explained.
Amb. Kim Eung-joong of South Korea, speaking at the launch, said: “This project is important in the realisation of goals of Government of Rwanda...the system gives taxpayers a better grasp of their inventory. We invite businesses to join it.”
Information from RRA shows that the system is time saving for taxpayers since both their sales and purchases are reconciled, meaning that at the time of filing taxes, the tax payers will just print out their VAT declarations, which saves time, and is more accurate.
Since the introduction of EBM in 2013, VAT performance has improved from Rwf110.5bn in 2013 to Rwf220.2bn in 2017.
VAT payable has increased by 99.34 per cent since the inception of the first version of EBM.