Rwanda Revenue Authority has launched a country-wide operation to track traders who do not issue IBM invoices to their clients.
Those that don’t comply with law will be forced to close their shops in 30 days.
Jean Paulin Uwitonze, the Assistant Commissioner of Tax Payer Services and Communications at RRA confirmed that the operation is aimed at increasing the full participation of taxpayers in paying taxes.
He said business closure will be applied to the taxpayers who were sanctioned more than five times but continued to be noncompliant.
“There are those that use IBM billings as required and we thank them but those that do not do so are to be sanctioned. Some traders are sanctioned with fines more than five times and more and this shows us that they do not want to fulfill their obligations. That’s why we have to take serious sanctions,” the official told the national broadcaster, RBA.
“We know all the avoidance tactics to evade taxes. That’s why we advise them to change their actions so that we all have the same contributions to the development of our nation,” he further urged.
RRA figures indicate a total of 1828 traders were sanctioned by the RRA for evading taxes worth Rwf600 million in 2020 while 1300 traders evaded tax amounting to Rwf719 million in 2021.
Meanwhile, in 2022 so far, 1500 traders were also sanctioned for evading Rwf600 million of taxes.
However, the small-scale traders lament the lack of knowledge on the use of IBM machines and laws on taxes.
Eric Niyonkuru is among them. He says the billing system is a good practice but he and other micro traders do not know the amount they are supposed to pay since their profits are very low compared to the larger taxpayers.
“For us, we don’t go to China to import huge merchandises,” he said, “I’m a micro trader and I get a profit of Rwf300 on trousers so how could you tax 18% VAT on such a little amount.”
Currently, there are registered 77, 000 IBM taxpayers compared to 1,000 users when the system was introduced in the country.
According to RRA figures the use of IBM fetched Rwf531 billion in revenues on value-added tax in the year 2020/2021.
Unfortunately, only 30% of taxpayers are accounted to use the IBM in the country, implying that awareness campaigns on the benefits of billing invoices are still needed.
As per the Ministerial order governing modalities of the use of Certified Electronic Billing Machines the businesses may be closed from carrying on further business activity for a period of one month.
Additionally, failure to use certified billing machines may attract fixed administrative fines in which a large taxpayer may be sanctioned to pay Rwf20,000,000 and Rwf10,000,000 to the medium taxpayer and 1,000,000 to micro taxpayers.