Revenue body threatens legal action against tax defaulters

Rwanda Revenue Authority (RRA) says it may consider legal action in a bid to recover accumulated tax arrears from several traders in the Northern Province.
Clients queuing at RRA head offices to pay taxes. The body is calling on businesses in the Northern Province to clear their arrears. The New Times/ File.
Clients queuing at RRA head offices to pay taxes. The body is calling on businesses in the Northern Province to clear their arrears. The New Times/ File.

Rwanda Revenue Authority (RRA) says it may consider legal action in a bid to recover accumulated tax arrears from several traders in the Northern Province.

Officials say that seizure of traders bank accounts and personal property are some of the probable options that maybe taken against such tax payers if nothing is done to clear the debts.

Richard Dada, the tax body’s Deputy Commissioner in charge of small and medium tax payers’ office, issued the warning yesterday during a consultative meeting with regional tax payers held in Musanze district.

The Northern Province has two major RRA stations located in Gicumbi and Musanze districts.

Available statistics indicate that the station in Musanze has accumulated over Rwf600 million in tax arrears.

“Auctioning your property or freezing bank accounts is the last resort but we may be tempted to apply the provision if that’s what it takes to recover the debts,” he said.

Dada said that among other hindrances, traders in the region are still reluctant to register their businesses or declare legitimate records indicating taxable incomes.

“This affects our accountability and enforcement measures in tax collection procedures,” he noted.

The Deputy Commissioner also pointed out that some big business owners who are already as  registered tax payers are sometimes hesitant to declare their actual income so as to be charged Value Added Tax (VAT).

Provisional laws stipulate that any trader who earns an annual income of over Rwf20 million or Rwf5 million in a period of three months is liable to pay VAT. Out of 5,386 tax payers, only 294 are VAT registered.

Under normal circumstances, upon registration, a tax notification is issued to a trader and is expected to be cleared in eight days.

Once the time elapses, a grace period maybe accorded upon consultation with RRA giving explanations on how one intends to pay the imposed tax.

Some traders who declined to be named admitted that at times they deliberately decline to declare valid documents because their profits are too meagre.

Fabien Nararibonye, RRA’s regional coordinator in the Northern Province, disclosed that wines and liquors often cross into the country without tax stamps from neighbouring countries.

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