As the budget day draws near, The New Times will for the remaining days publish views and expectations of ordinary Rwandans, experts and academicians on the budget that will be presented to Parliament by the finance minister on June 12. Today, traders tell us why they want the policy on EBMs to be reviewed

The business community wants a review of penalties imposed on traders who evade taxes or do not use the mandatory Electronic Billing Machines (EBMs). They hope that their concern will addressed in the 2014/15 financial year budget, according to Gerard Mukubu, the chief advocacy officer at the Private Sector Federation.

According to the policy, any big tax-payer who does not use the e-billing machine and so evades VAT is liable to a fine of Rwf20m when caught and prosecuted. Small-and-medium businesses that are found contravening the law could suffer between Rwf5m and Rwf10m in fines. 

However, Mukubu said the penalties are too harsh and should be revised, arguing that they could discourage the entrepreneurship spirit. 

"There are cases when a trader does not use the machine due to power outages or ‘unknowingly’ types wrong figures. These errors could be made by anyone and are not intentional, but the victims stand to pay the same fine as the one who evades taxes intentionally,” he argued. 

While reading this year’s budget, Finance Minister Amb Claver Gatete announced that all taxpayers registered for Value Added Tax (VAT) would use EBMs, among other electronic platforms, to ease collection of tax and non-tax revenues. Other e-payment options include electronic filling and payment of taxes, electronic single window system for different import and export bonded warehouses and electronic cargo tracking to protect and monitor cargo in transit.

The EBMs were introduced in 2012 to enable traders record transactions electronically, manage sales and invoice every transaction. 

The details of each transaction are stored and simultaneously transmitted to the Rwanda Revenue Authority (RRA) database, easing calculation of taxes for each entity. 

Despite the grace period of over a year given to tax-payers by RRA to buy them, only 4,000 out of the 7,500 VAT-registered businesses had acquired the machines by April. 

The tax collector had given a March 31 deadline for all traders to have bought EBMs or risk prosecution. 

Donathe Uwimana, a trader in a Kimironko, told The New Times that the penalties increase the cost of doing business.

She said if the policy is not revised, it could lead corruption as traders try to bribe RRA officials to escape punishment.

RRA targets to collect Rwf581b in taxes this year.