RRA draws Rwf22 billion above target

Rwanda Revenue Authority (RRA) surpassed its target for the second year in a row, remitting to the national treasury Rwf675 billion during the 2012/2013 financial year.
A crane moves a goods container at Magerwa container terminal. Efficient recovery of tax arrears and internally designed tax administration and collection measures have ensured improve....
A crane moves a goods container at Magerwa container terminal. Efficient recovery of tax arrears and internally designed tax administration and collection measures have ensured improve....

Rwanda Revenue Authority (RRA) surpassed its target for the second year in a row, remitting to the national treasury Rwf675 billion during the 2012/2013 financial year.

This is Rwf22 billion above the target set by the Ministry of Finance and Economic Planning .

The Commissioner General, Ben Kagarama, attributed the higher-than-projected revenue collection to good economic performance, efficient recovery of tax arrears and internally designed tax administration and collection measures that ensured improved compliance.

Kagarama said the revenue body tightened its debt recovery mechanisms, leading to recovery of about Rwf26 billion in tax arrears.

Evidence of good economic performance was reflected in higher returns from income revenue–both individual and corporate taxpayers, especially during the last quarter of the financial year that ended on June 30.

As expected, most of the collections were from tax revenue that mainly includes import duties and consumption taxes that brought in Rwf664 billion against the target of Rwf641 billion.

Non-tax revenues, on the other hand, performed below target at only Rwf10.7 billion. RRA had targeted to collect Rwf12.2 billion from these services-based sources of revenue.

“Non-tax revenue is only collected when the public demands and pays for services. When there is no demand, there is no tax. There is, therefore, no science in collecting non-tax revenue,” Kagarama said.

Speaking at a news conference convened to update the public on the implementation of the single customs territory for the Northern Corridor (Kenya, Uganda and Rwanda) in Kigali, yesterday, Kagarama said many challenges hampered revenue collection during the financial year.

He cited reluctance by some businesses to use the recently introduced billing machines. Kagarama said many businesspersons still claim that they don’t know how to use the machines or the machines were not working.

“In some cases, there is outright resistance to use the machines intended to improve tax compliance,” Kagarama said.

The RRA chief also faulted some importers for abusing the system by under-declaring goods leading to loss of revenue. 

“We shall continue educating taxpayers, but we shall also enforce the law very seriously. Actually we have already started, but still giving chance to voluntary compliance. If that fails, we shall enforce the law,” he said.
 
Single customs territory 

Meanwhile, RRA also briefed journalists on the progress of the implementation of the Single Customs Territory by Rwanda, Uganda and Kenya. 

While a high-level task force is still out there putting final touches on recommendations for the creation of single customs territory under the auspices of the East African Community, Rwanda, Uganda and Kenya are moving ahead to introduce it on the northern corridor route. Rwanda is fast-tracking the process.

Under a single customs territory, clearing of goods will move away from internal borders to the first port of entry, the Port of Mombasa in Kenya.

Benefits

Once in operation, importers will save time and money.  With the recent opening of a Kenya Ports Authority office in Kigali, Rwanda-based importers will be able to pay port fees from home, pay taxes at Gikondo and have their goods released from Mombasa direct to their warehouses with limited or no additional inspection along the way.

Commissioner generals of the three national revenue bodies met in Kigali on July 6, to draw a roadmap for the implementation of this project.

During the meeting, three technical committees of ICT, business processes and enforcement were established to deal with clearing, regulation issues and development of software platform.

Kagarama said the ICT platform will be tested on August 12.

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