Despite an increase in taxes collected by Rwanda Revenue Authority (RRA), it has appeared that some tax payers are learning and investing in techniques to evade taxes.
RRA announced today that it collected Rwf 470.6 billion against the targeted Rwf 460.3 billion in the second half of 2015. This includes Rwf 455 billion of tax revenues and Rwf 7.1 billion in non-tax revenues.
Despite an increase of tax revenues by 13.9% in that period, RRA could have done even better, hadn’t there been “experts” in tax evasion.
“There is a new trend of ‘experts’ in tax evasion,” Richard Tusabe, commissioner general of RRA, told KT Press earlier on Tuesday.
“Those are some accountants in the country, who seek the honest tax payers and show them a formula on how they can evade taxes.”
Most evaded taxes are VAT. Between May and August 2015 alone, over Rwf380million was recovered by the Rwanda National Police Revenue Protection Unit.
RRA believes billions of francs in taxes were evaded, especially by manipulating VAT, non-compliance such as resistance by most traders to use electronic billing machines and reporting undervalued imported goods and services.
Tusabe also said, by the end of 2016, every taxpayer will have to use the electronic billing machine.
Currently, only VAT taxpayers use electronic billing machines. Those are taxpayers who have an annual turnover of Rwf 20million.
Meanwhile, RRA is expecting the tax base to increase after registering 9,966 taxpayers from 8,096 just on VAT in the second half of 2015.
With this increase, the total expected taxes are Rwf494.16 billion but the total revenue is expected to be Rwf507.46 billion compared to Rwf 460.3 billion of 2015.