The Rwanda Revenue Authority (RRA) has warned tax consultants who mislead or encourage clients to evade taxes, saying they will be apprehended and punished according to the law.

The tax body said there are some consultants encouraging taxpayers to under declare their returns, manipulate systems, or even default altogether.

Richard Tusabe, the RRA Commissioner General, said the tax body has so far arrested and punished some of the culprits involved.

Tusabe added that the revenue authority will continue to strengthen market surveillance and mechanisms aimed at minimising default cases and tax leakages. He said some business people, especially importers, have a habit of under declaring goods to dodge taxes.

He said the revenue body is working with its counterparts in exporting countries, including China and United Arab Emirates, to ensure all imported products are properly assessed for taxation before they enter into the country.

Recently, traders complained of high taxes and penalties levied on traders found not using electronic billing machines.

According to Andre Bitwayiki, the City of Kigali Private Sector Federation (PSF) branch chairman, some of the penalties are unfair and ‘encourage’ tax evasion.

Emmanuel Habineza, the BDO East Africa Rwanda managing partner, said business cannot use losses as an excuse to avoid their tax obligations.

"Actually, declaring losses is being compliant... All companies should do is ensure they have clean audits before they can declare,” Habineza explained.

He noted that many entrepreneurs fear tax authorities and "tend to do audits to keep the taxman satisfied”.

Habineza challenged auditors and tax advisors to help demystify this fear so that entrepreneurs and RRA get right information concerning their businesses.

"The standard practice is that RRA often requires an audit only when a company has made a turnover of Rwf400 and above. Therefore, the business community should understand that the company’s law observes that annual financial report be filed with an audit report except for small entities (those with a turnover of less than Rwf150 million),” said Habineza in an interview with this publication.

The revenue body has said it will conduct registration for local government tax by identifying unregistered taxpayers, noting this will boost their efforts to meet this year’s targets.

RRA collected Rwf470.6 billion against a target of Rwf460.3 billion during the first six months of this financial year, with tax revenue collection for July-December 2015 standing at Rwf463.5 billion compared to Rwf455.0 billion targeted. This was Rwf8.4 billion above projections, giving RRA confidence it could meet its annual revenue targets.

Overall, tax revenues grew by 13.9 per cent during this period, with non-tax revenue collections of Rwf7.1 billion registered against Rwf5.2 billion targeted, and a surplus of Rwf1.9 billion, or 35.6 per cent above target.

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