With the recent introduction of a new taxing system of commercial vehicles, Rwanda Revenue Authority [RRA] expects to collect an addition Frw6m.

Previously, RRA taxed according to the mode of car, but with the new system, the tax body will be considering capacity carried by a commercial vehicle.

"We were collecting Frw1,074 million but we expect to collect an estimate Frw1,080 million,” said RRA’s Pierre Celestin Bumbakare, Commissioner for Domestic Taxes.

"We expect to collect more taxes because now we are collecting according to the number of passengers and with trucks we look at the load carried,” explained Bumbakare.
He estimated that there are 4,000 commercial vehicle owners. 

The commissioner announced the new system of taxation at RRA premises in a meeting with representatives from transport companies.

For a 14-sitter mini-bus, the estimated annual earnings were Frw3m but increased to Frw4.2m, 18-sitter mini-bus, from Frw3.6m to 5.4m, a 28-sitter bus from Frw9m to Frw5.7m, 40-sitter bus from Frw9m to Frw12m.

But the same document shows that the net estimate earnings for a 28 sitter were decreased from 9m to 5.7m. Taxation on trucks will be based on tonnes carried and will tax four days in a week.

Besides 4 per cent of the profit earned, Pay As You Earn [PAYE] of Frw300, 000 is also paid by the commercial car owner.

Bumbakare said that the change was prompted by persistent complaints of unfairness to small sized commercial cars by the previous criterion of taxation. He said that the change comes with less pressure and inconveniences.

The new system will reduce the number of times the transporters frequent RRA to either quarterly or annually unlike previously when they were required to pay monthly. A fine of Frw100, 000 on failure to beat the monthly tax payment will have been done away with.

Theodore Murenzi, representing drivers and owners of heavy trucks said, "They have done away with the penalty [fine of Frw100, 000]. Previously there was a poor system of collecting taxes, we had to endure expences of frequenting RRA,” Murenzi appreciated.

But he also queried that; "when you come to calculations, there is an increment. They are still counting yet the car may be under repair which can even take a month.”

In response to one of the recurrent queries during the meeting, Bumbakare said that for commercial vehicles not functioning, "bring proof that you are not working, present a document from the insurance company as proof or one should come with a number plate on the day he is supposed to be making payment.”

The first payment with the new system is expected in September this year.

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