Over the course of the last four financial years, we cleared our pass to the co-operative compliance.
This involves Revenue Authority and the business community agreeing on the actions that each party must take to ensure your business is tax compliant.
We can use this experience to help your business during tax risk reviews by highlighting the risk areas that you need to be aware of.
I am thrilled to announce to the general public the results of the FY 2019/2020 that we just concluded. We had a target of collecting Rwf 1,568.5b, where we managed to collect Rwf 1,461.3 from taxes which represents 93.2%. For non-fiscal collections, we managed to collect Rwf 19.3b on the target of Rwf20b representing 96.8% (figures presented before reconciliation)
Although we slightly fell short of the target due to the outbreak of Covid-19 Pandemic, it is important to note the growth of 4.5% year on year which is equivalent to Rwf 62.3b compared to the collections of the previous FY 2018/19.
With your support as stakeholders, the implementation of the previous Compliance Improvement Plans were really paramount.
Tax revenues have increased in almost all targeted sectors and in almost all tax heads. Taxpayers’ registrations have increased and late filing of tax returns has decreased.
In this FY 2020/2021 we have opted to mainly enhance our compliance improvement plan to the following sectors/areas:
- Financial services sector, mainly insurance companies, microfinance institutions and Forex bureaus
- Suppliers of Hotels, Bars and Restaurants sector,
- Importers
- Customs brokers (Clearing Agents)
In this fiscal year, we will also focus on remedial actions for the findings of the research recently conducted on Taxpayers’ behavior.
Therefore, for this year 2020/2021 we have put in place plans which we will strive to implement in your collaboration to achieve voluntary compliance.
To highlight just a few, we shall:
- Encourage the Private Sector Federation (PSF) and Rwanda Freight Forwarders Association to coordinate meetings and workshops with high-risk importers and Customs brokers.
- We shall continue to use modern risk management tools to identify tax compliance risks
- Extend EBM Project to all taxpayers and ensure its appropriate use.
- We shall strengthen our media programs to communicate RRA services available to identified sectors.
- Conduct education seminars and advisory visits for cooperative compliance
- We shall make a follow up to register potential unregistered taxpayers (potential taxpayers operating outside the tax)
In this FY, we will also continue with Policy measures and consideration to mitigate effects of Covid-19 including but not limited to;
- The computation of the quarterly payment for Corporate Income Taxes and Personal Income Tax (PIT) will be based on the transaction of the current year.
- All Transportation motor vehicles conducting business will pay their quarterly fixed personal income tax for this year based on pro-rata to the period of operations.
- Pay As You Earn will be waved for a period of six months (from April-September 2020) for teachers of private schools earning up to frw 150,000,000 net salary.
- All facemasks used for the protection against COVID-19 made in Rwanda are hereby exempted from Value Added Tax.
IN CONCLUSION,
While much progress has been made, there is a lot yet to be done to translate all of these communicated compliance improvement plans into reality. Given the spirit of cooperation and collaboration that exists among the parties involved in this effort, I remain confident that we will achieve our plans.
However, tax crime is not different from any other crime – it cripples our economy and our society. Just like any other crime. You can contribute your effort to combat it in two ways: by not participating in such activity or condoning criminality yourself and by reporting those who act outside the scope of law.
Let’s continue observing the measures of preventing the spread of Covid-19 pandemic, work together to Build the a Better Rwanda.
