Invest in rural areas, RRA tells women

Rwanda Revenue Authority (RRA) has urged women to invest in rural areas saying the big population there means a potential market for commodities.

Rwanda Revenue Authority (RRA) has urged women to invest in rural areas saying the big population there means a potential market for commodities.

Mary Baine, the commissioner general of RRA said last year the government collected more tax from small payers in rural areas.

Meaning that if more investments are carried out in rural Rwanda, there will be an increase in the Rwanda’s fiscal performance.

"Business should also be taken to the rural areas because they comprise the biggest percentage of the Rwandan population," said Baine.

She was addressing women on their contribution to tax collection and economic development Friday last week. The tax body is consulting different stakeholders on how tax collection can be improved.

Investing in the rural areas would also ensure uniform distribution of income in the country.

Incentives announced

Baine said her institution is to revise taxes charged on agriculture produce especially the flower and passion fruits.

The idea, according to the commissioner general is to encourage the development of these sectors so that they can spur economic growth and development.

Taxes on arts and craft and the financial sector-- mostly in micro lending are also likely to be revised downwards.

Baine advised women who account for 52 per cent of the Rwanda’s population to allot part of their investments in these sectors so as to take advantage of the proposed tax benefits.

RRA slow

However women criticized RRA customs department for the delays during clearing.

They alleged that even if one had all taxes paid, it takes about a week for ones goods to be cleared.

According to the traders, this affects the profitability of their businesses and leads to loss of customers.

They argue that it even becomes worse when one is using debt to finance her business.

The tax body however transferred the blame to the traders saying that some of them don’t cooperate.

RRA urged women to follow right procedures when declaring their goods thereby creating confidence and good understanding between the tax authority and the taxpayers.

Eugene Torero, RRA assistant commissioner general said it is important traders provide all information and supporting documentation to ensure transparency.

"Good declaration will help us reduce on the delays. If there are inconsistencies in declaration, then there will be delays," he said.

Irregularities

The main irregularities identified are undervaluing of goods, misrepresentation, neglect or omission of some information.

Torero said that trader pass through three channels including; green, blue and yellow channels according to their tax compliance.

People who pass through the green channel without being asked, have nothing to declare and are usually carrying dutiable goods within the prescribed free allowance.

This passengers can simply walk through the green channel with their baggage on the basis of their oral declaration.

Users of the yellow and blue channels have something to declare and they are also checked basing on what they posses and their records.

RRA says there are many institutions in charge of clearing the goods which makes it difficult to point out the institution which causes much delay.

These institutions include Rwanda Bureau of Standards, National Police, and Magerwa, Rwanda’s bonded warehouses.

Torero said that the time release study indicates that if a trader uses the border, the delay will be seven days where as the delays at the airport is nine days.

This comes at a time Rwanda and Uganda are in bilateral talks to ease clearing goods and movement of people between the two countries.

The talks may soon see customs, immigration and security officials from Rwanda and Uganda jointly clearing.

"If you have been spending 2 hours clearing at Gatuna (Rwanda) and Katuna (Uganda) border then the time will be halved," Torero earlier said.

The tax body said that since it introduced the pre-clearance service, delays have reduced considerably.

24 hour service

Rwanda revenue authority has spearheaded the government initiative of working for 24 hours.

However the tax body asserts that the demand is not matching their service supply and that there is need to convince the neighboring countries of Uganda, Kenya, Tanzania, Burundi and the Democratic Republic of Congo to adopt this strategy.

"There is need for harmony among the neighboring sates. And if the demand is available we can work for 24 hours to meet customer demands," said Baine.

She added that some times the RRA employees work beyond 8:00 pm depending on the client’s inflow. But this, according to the commissioner general is not a consistent trade.

Impact of the EAC

Rwanda’s joining the East African Community has helped increase its taxes, partly due to the bigger market.

Baine said that considering the impact of the EAC, the market (taxable) has grown from Frw9 million in 2005 to Frw115 million in 2007.

This has also seen the Rwanda’s tax revenue increase.

Last year, RRA collected Frw248 billion from both taxes on goods and services. That was 11 per cent higher than Frw220 billion targets it had set for that year.

This year Rwanda revenue authority targets to collect Frw264.8 billion.

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