A new strategy that is designed to increase tax compliance among clearing agents has been unveiled by the Rwanda Revenue Authority (RRA).
Gadi Munyentwali, the RRA deputy commissioner in charge of risk management, said the compliance improvement plan aims at ensuring that clearing agents and importers meet their tax obligations as prescribed by law.
“We developed this strategy to further improve compliance in the sector. It will also help us understand challenges that deter compliance, as well as the associated risks,” Munyentwali said.
The plan runs from this year and throughout 2018.
“According to our experience, some importers connive with clearing agents to avoid paying their taxes,” he added.
He speaking during a tax sensitisation seminar targeting clearing and forwarding agents in Kigali on Tuesday.
“The tax body official said agents sometimes give importers wrong information which compromises compliance with tax regulations,” he added.
Munyentwali noted that noncompliance and international misclassification of goods were still widespread among clearing agents, adding that the revenue body had discovered a “significant lack of classification knowledge among agents”.
“We still see intentional use of fictitious invoices as well as significant abuse of investment certificates and exemptions among some agents. We are, therefore, confident that the compliance improvement plan will help us to address these challenges going forward,” he told the agents.
Unscrupulous agents cautioned
Meanwhile, the revenue authority has warned noncompliant clearing agents and freight forwarders that it will start publishing names of any agents involved in malpractices for criminal prosecution.
“We shall equally recognise those agents who will have met their tax obligations and scored highly during any reporting period.”
Drocelle Mukashyaka, the deputy commissioner for taxpayer services, called on the agents to embrace a “more cooperative approach” to reduce the risks associated with noncompliance.
“It is imperative for clearing agents to always seek information before advising their clients to make tax remittance easier,” she said.
Clearing agents speak out
Commenting on the new strategy, Theogene Rukundo, the managing director of Travel Logistics Ltd, urged the revenue body to sensitise the forwarders, especially on the revised rules of origin and tax calculations vis a vis the transaction value on most imported goods.
“Most traders are complaining about unharmonised custom valuations and the actual price of commodities,” he said.
Grace Mulinda, the managing director Royal Links Clearing Agency, said RRA should give the agents the list of changes and also train them to support the sector, arguing that this will enhance compliance.
“There needs to be clarity on product classifications so that both the importers and the agents understand what is required of them,” she noted.
Mulinda, however, challenged clearing agents and freight forwarders to conduct themselves in an ethical and professional manner to “make the sector more tax complaint and competitive”.