The Revenue Protection Department (RPD) has announced that it would increase efforts to crack down on cross border smuggling and domestic tax fraud activities which usually surge at the beginning of the festive season.
The Director for RPD, Robert Mugabe, disclosed that a trend indicated that dishonest traders in the region smuggle tonnes of goods across borders particularly towards Christmas time in order to exploit the high demand of goods at the time.
“When smugglers enter the market with their products, they hamper the normal flow of trade regulated by the price and demand of goods. The local trader then suffers losses because he must compete with relatively cheaper goods that were smuggled into the country,” Mugabe said in an interview with the Business Times.
“We work with the police and have increased the number of intelligence informants who know the tricks that smugglers use and alert us whenever they detect foul play in trade spheres. We are hopeful that these efforts will scare away unfair traders and facilitate the growth of our economy.”
Statistics from RPD indicate that revenues recovered from goods impounded from smugglers the financial year 2010/2011, amounted to Rwf930m.
Liquors, wines, accessories and foodstuffs are the goods that were smuggled most.
Mugabe said that the festive period is also characterised by high levels of fraud executed by domestic traders who do not offer receipts or indicate false accounts on the receipts for the matter of tax evasion.
“Assessments through our investigators have brought many traders under scrutiny for tax evasion; for those that are notorious, we have had to fine them heavily but within the limits provided by the taxation law,” Mugabe said.
In financial the year 2010/2011, fines and taxes recovered from fraud cases in domestic trade amounted to Rwf2.4b compared to Rwf1.7b recovered from smuggled goods and domestic tax evasion activities in 2009.
With burgeoning number of business activities that has bolstered the country’s tax base RRA faces a major challenge of raising the number of investigative auditors to effectively monitor trade and shelter the economy against unlawful practices.
Last week police seized 3,000kgs of cassiterite, which is labelled as one of the “conflict minerals” as it was ferried from DRC to Rwanda via L. Kivu in Karongi District.
“We are enforcing stringent measures where the country will not be used as a destination or transit route for illegal minerals and other unwanted substances,” Police Spokesman, Theos Badege, told the Business Times.