Over the past years, the government has done a lot in ensuring that it provides facilities and an environment that promote socio-economic development in communities. These can be evidenced by the beautiful road networks across the country, security, hospitals, access to clean water and electricity, among many others. 

However, few people ever ask themselves where the government gets the funds to invest in all these developments; forgetting that the money actually comes from the taxes they pay from business activities.

However, the need for self-sustenance, social and economic development requires strong-willed individuals who are prepared to pay taxes without complaining and contribute to the national coffers from where the government gets money to fund community projects. 

For those who are always reluctant to meet the obligations, the Rwanda Revenue Authority (RRA) has from time-to-time organised sensitisation campaigns to help citizens understand the importance of paying tax and in time. RRA usually educates people on various taxes for the various groups of taxpayers to increase tax compliance and tax mobilisation, as well as widen the tax base.  

Over time, taxpayer sensitisation campaigns that are always held in partnership with local authorities, Private Sector Federation and security agencies have proved to be effective in tax mobilisation and enforcement.

Some of the taxpayers voluntarily pay their taxes, but there is a large group that is not as compliant as their counterparts. That’s why at times the tax body has to step in and apply tax enforcement mechanisms to recover government taxes that could be lost if this group is not compelled to meet their tax obligations.

To ensure people pay taxes without facing undue processes, RRA introduced the electronic billing machine system for all VAT-registered taxpayers. The advantage of this approach for both the taxpayer and the tax body is that taxpayers can now easily manage their stocks, sales and minimise errors that were made in tax declaration and payment as the machines are designed in such a way that enables data transfer to RRA data bank. In addition, the VAT refund process has become automatic for compliant taxpayers since the required data is already in the RRA database.

In its continuous efforts to increase tax awareness and use of electronic billing machines, RRA last week started conducting an extensive VAT invoicing campaign in the City of Kigali and along major highways leading to the Provinces. The new drive aims at sensitising taxpayers on issuance of tax invoices using billing machines by VAT registered taxpayers. It also seeks to find out and understand possible challenges faced by taxpayers, especially on the use of billing machines, with the view addressing them. During the campaign, RRA officials will explain to businesspeople the likely penalties one could face for non-compliance.

Also some of traders have not been using the billing machines as required by the law, while others are still hesitant to give clients tax invoices for all the items bought.

This practice is also common among retailers, with the majority not issuing customer receipts of whatever items they could have bought voluntarily until one asks for receipts (tax invoices). Don’t be surprised for a trader to ask you: "Do you want a receipt?” Of course, this rhetoric seeks to find out whether a client knows their obligations of asking for receipts whenever they pay for goods or services across the country.

In another instance, some non-compliant taxpayers may choose to keep two receipt books so they can falsify receipts. Statements like "I do not have a receipt book...” are also common (in case you insist on getting the receipt for the items bought.

However, having realised all these challenges, the tax body has put in place facilities to ease payment of taxes. These include initiatives like e-filing and e-payment system, M-Declaration, where one can use a mobile phone to declare taxes, quarterly payment of VAT. All these facilities were put at the disposal of taxpayers to make it comfortable for taxpayers while declaring and paying taxes.

In a nutshell, if businesspeople used all the available facilities at their disposal to fill tax returns, it is less likely that RRA would be compelled to swing into action and collect the taxes due using all means possible, including punishing the defaulters. Remember, we all have a responsibility to contribute to nation building and, meeting our tax obligations in time is one way of fulfilling that role.

The writer is the head of media  and customer relations at Rwanda Revenue Authority