The law on Value Added Tax (VAT) is once again under review for amendment.
This is to curb disputes with taxpayers over interpretation and to make provisions for the taxation of new types of services introduced into the economy, among others.
Pierre Celestin Bumbakare, the commissioner for domestic taxes at RRA, shed light on the development, after the lower chamber’s Committee on National Budget and Patrimony and officials of the Rwanda Revenue Authority (RRA) started examining the legislation, Monday morning.
Bumbakare told The New Times that since the law was introduced in 2001, a lot has changed on the tax scene.
“There are new businesses that have come in which were not covered by the law. Examples include capital markets, and leasing,” he said.
The RRA official explained that the ongoing review also intends to simplify the law, in terms of language, and coherence.
“The previous law was too large, with nearly 89 articles. We want to put in place a simpler one with 33 articles.”
Another reason is to provide a single consolidated law with all provisions required for VAT administration in the country.
The country’s level of interaction with the world economy, particularly within the EAC, is increasing and gradually bringing in new business concepts as well as new service types.
The existing law does not reflect these types of services, and thus creates legislative gaps.
Apart from leasing and capital markets, the new law is expected to cover tax treatment of vouchers as well as treatment of post-sale adjustments, which include cancellation of taxable supply, among others.