Employers will be able to make online declarations and pay taxes as well as social security contributions for their employees thanks to a new unified declaration system.
The online-based declaration for Pay as You Earn (PAYE), pension and occupational hazards, medical and maternity leave benefits dubbed "PAYE-Unified or Unified Declaration” was jointly launched by Rwanda Revenue Authority (RRA) and Rwanda Social Security Board (RSSB) on Friday.
It was developed from RRA’s already existing e-tax system.
According to officials from RRA and RSSB, the digital system will ensure that employers effectively remit their workers’ PAYE and contributions to RSSB.
Previously, officials said, some employers would only pay RRA taxes and not remit their workers’ contributions to RSSB, or vice versa, which was difficult to control or monitor because previous systems were largely manual.
The new system is envisaged to reduce the workload of filling out three or four separate annexures since one single annexure is filled out and uploaded instantlyl.
"The person would come to RRA to declare PAYE taxes. After filling required forms, they would go to the bank to pay due tax. Later, they would go to RSSB to declare due contributions, and then go to the bank to make payments, which was both time and money consuming,” Pascal Bizimana Ruganintwali, RRA’s Deputy Commissioner General told journalists at the launch of the system.
He added that; "But, as they are now able use their computer wherever there are, entre RRA website and fill only one form and entre all the data at once, as well as being able to use mobile phone-based transactions to make payments, or make e-payment using their bank account, which is really more efficient.”
RSSB Director General Jonathan Gatera said that the two institutions decided to join their systems to set up the new one because they have the same clients and that the old system was creating unnecessary workload, hence some inefficiencies.
"Having all the tax and contributions unified in one system will just facilitate the contributors by making one action other than going forth and back. This has proved to be very successful,” he said.
To use the system, the employer enters RRA’s e-tax system and puts in the required information, including all names and the National Identity card number of the employee, among others. In case wrong information is entered into the system, intended transactions cannot be processed.
However, the institutions stated that it doesn’t fully replace the already existing system, but rather, they will work concurrently, given that there are contributors who are not PAYE registered.
In the pilot phase, 804 contributors and taxpayers have used it and filed returns since 2016.
The number of the current users of the system represent only about 6.9 per cent of over 11, 800 taxpayers or contributors who should use it, according to Ruganintwali.
There are about 600,000 employees contributing Rwf75 billion to the public pension scheme annually. However, the numbers represent less than 10 per cent of the people in the workforce. The informal sector, especially small private businesses, constitutes a large part of those who are not covered by the pension scheme as they do not contribute to the pension scheme.
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