Rwanda Revenue Authority (RRA) has urged business operators to always crosscheck invoices from suppliers as the body intensifies the fight against counterfeit value added tax (VAT) receipts. The tax body is grappling with multiple challenges of fake VAT receipts, undeclared VAT, and delays in filing tax returns.

Emmy Mbera, the RRA electronic billing machines (EBM) project coordinator, also called on traders and general public to always alert RRA in case they are issued a suspect receipt so that it takes appropriate action.

"We will spare no effort in apprehending and punishing the culprits as per law prescribed,” Mbera said during tax sensitisation and awareness campaign for large and medium tax-payers organised by RRA in Kigali on Thursday.

He said the challenges are worsened by traders who often blame their accountants. 

"Many business owners do not want to take responsibility when their firms are found to have filed fake receipts or delayed VAT returns. However, they cannot escape our net as we have already tightened tax administration to weed out the vices that are affecting collections,” Mbera told the participants.

This is not the first time RRA is raising the red flag about companies submitting fake VAT receipts.

Last month, RRA officials said they had apprehended some tax-payers suspected of trying to defraud the government of billions of francs using fake EBM invoices to make VAT claims on fictitious sales. The tax body says other businesses were undervaluing some items on the EBM receipts to evade taxes.

According to RRA, the false claims were discovered when some firms were applying for VAT refund from the institution.

Ordinarily, when traders claim for VAT refund, RRA compares VAT input incurred when they buy products and VAT output of revenue after sales. If the input is higher than the output, traders can apply for a refund when filing their tax returns, according to RRA officials.

Aimable Kayigi Habiyambere, the RRA commissioner for domestic taxes, said the tax body will not relent in its efforts to ensure compliance, and also apprehend those who want to use fraudulent means to evade their tax obligations.

"While we want to appreciate those complying and provide them with facilities that will help their business grow, we would also want to sound a warning for anyone involved in this malpractice to abandon it or face the full force of the law,” he warned.

25 fraudsters apprehended

Meanwhile, Gadi Munyentwali, the RRA deputy commissioner for corporate risk management, advised companies to take extra care before filing returns, saying some VAT receipts from suppliers could be fake.

He noted that over 25 firms have so far been linked to the fraudulent activities, where fake receipts were issued to 700 tax-payers.

The revenue authority is currently meeting all taxpayers to understand better the problem, according to Drocelle Mukashyaka, the RRA deputy commissioner for taxpayer services. Mukashyaka said the idea is to work with stakeholders to find a sustainable solution that will further enhance tax compliance in the country.

"We will meet and engage all the stakeholders across the country in our efforts to solve these challenges,” she said.

She said they are working to devise mechanisms that will help in risk assessment besides fostering tax compliance among tax-payers.

The revenue body targets to raise Rwf1,084.4 billion this financial year or 55.6 per cent of the Rwf1,949.4 billion total national budget for the year.

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