Rwanda Revenue Authority (RRA) has reduced tax penalties from 100 to 50 percent. This was revealed Tuesday during the second RRA and Private Sector Tax Issues Forum meeting.

According to Celestin Bumbakare, the RRA Commissioner for Domestic Taxes, high tax penalties were among the problems that were raised by members of the private sector, in the previous forum that was held last August. The move therefore, comes as a solution to lower the heavy tax penalties.

"In a bid to facilitate trade and promote business growth in Rwanda, in conjunction with the Private Sector Federation (PSF), we established a dialogue in form of tax issues forum (TIF) where tax issues are tabled with the aim of finding solutions jointly,” he said in an interview with The New Times yesterday.

Bumbakare noted that the forum is in line with the government’s need to have the private sector-led economy reflected in the vision 2020.

"The RRA in this regard is one of the instrumental public institutions that support private sector development in Rwanda, which is therefore necessary to use dialogue as an effective tool for solving certain challenges,” he expressed.

He added that, when people meet and exchange ideas deeply prevailing problems are solved easily hence both parties have the same understanding.

Bumbakare however cautioned that lowering tax penalty should not give taxpayers reasons to make wrong assessments of themselves; he urged them to declare correct tax figures and pay promptly in order to avoid any penalties.

Some taxpayers also complained about the long queues during tax payment which subsequently translates into delays.
The RRA commission assured them that new policies are being put in place to address this issue.

"Apparently we have signed an agreement with Bank of Kigali, such that all clients of the bank pay their taxes at BK instead of queuing at our office. This will start with effect from January 2009,” he added.

About 30 percent of the taxpayers are clients in BK so this move will decrease the number of tax payers that queue at the Authority.

Bumbakare however added that it is still very important for taxpayers to clear their taxes ahead of the deadline.

The private sector led by Prisca Mujawayesu, the Deputy Secretary General of PSF, thanked RRA for responding positively to their tax related problems and requested that the Authority becomes an advisory council to the business community with regard to increasing compliance levels.

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