Rwanda Revenue Authority (RRA) urges taxpayers to take advantage of the one-time opportunity to voluntarily disclose unreported tax liabilities and benefit from paying only the principal tax, without fines and penalties for late declaration and payment.

The Ministry of Finance and Economic Planning launched the three-month period on March 22, 2024, and it runs until June 22. Eligible taxpayers can voluntarily disclose any domestic taxes they owe from 2022 backwards, excluding customs duties.

Emmy Mbera, Assistant Commissioner for Tax Control at RRA, emphasised the importance of voluntary disclosure. He explained that audits are regularly conducted to ensure proper tax declaration and any unreported taxes discovered incur penalties and interest.

"Voluntary disclosure allows businesses or individuals to proactively disclose unreported tax liabilities before an audit,” Mbera said, adding, "This scheme allows them to pay only the principal tax, even if it’s for several years back, with no penalties or interest imposed.”

Ministerial order Nº 001/24/03/TC of 08/03/2024 determining modalities and conditions for taxpayers to benefit from voluntary disclosure incentives, according to Law No. 020/2023 of 31/03/2023 on tax procedures, especially in its article 94, provides the waiver of interests for late payment and penalties due to voluntary disclosure.

This opportunity is open to anyone who does business, whether registered or not. The domestic taxes under consideration include income tax, value-added tax, local government taxes such as immovable property taxes, and others, which were to be declared from 2022 backwards.

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So far, hundreds of people have participated in the programme and are reaping the benefits. The RRA encourages those who haven’t yet come forward to act quickly, as the deadline is approaching.

The law stipulates that a taxpayer who is granted the voluntary disclosure incentives pays the total amount of principal tax disclosed within 30 days from the date of approval. However, a taxpayer may be allowed to pay in instalments of their choice within six months from the date of approval of the application, if the taxpayer presents valid reasons.

Those who disclosed in the first month of the scheme benefited from paying 50 per cent of the principal tax upfront, with the remaining amount being paid in five instalments over the following months.

For disclosures made in the second month, taxpayers pay 50 per cent upfront, with the remaining amount paid in three months. If the disclosure is made in the third month, a taxpayer will pay 50 per cent upon applying and the remaining 50 per cent the following month.

Individuals ineligible for this scheme include those who have already received notification of a forthcoming tax audit. However, the same individual can show up for assessment on a different tax not currently under audit.

Mbera asked people to assess their business figures, analyse what they have sold, what was left in their stores, business expenses, payments to employees working in Rwanda or abroad, etc.

"They should do it quickly before we reach that deadline. It’s a great opportunity for everyone to disclose during this period, declare his/her due taxes, pay them, and get a chance to have penalties and late interest waived,” he added.

RRA has been meeting different clusters, explaining this opportunity, and encouraging them to make use of it before it ends. One of the sectors is the mining industry.

Frank Butera, Executive Secretary of the Rwanda Mining Association, commended the RRA for inviting them to discuss the opportunities provided by the voluntary disclosure scheme.

"It’s time for self-assessment. If someone finds something he/she forgot to declare or didn’t declare properly, this would be an opportunity to correct that,” he said.

Among other clusters met were the European and American Chambers of Commerce committees.

Lauren Nkuranga, Board President of the American Chamber of Commerce in Rwanda, highly commended the initiative.

"I think this is a terrific initiative and one that we want to make sure not only all of our members are aware of, but we can also help communicate this to the broader American and European communities,” she said.

The application process is simple. Taxpayers can disclose their unreported taxes through the RRA website portal https://www.rra.gov.rw/en/home, indicating the tax type and period, along with the related supporting documents.

However, the voluntary disclosure does not grant any right to a refund of input tax or tax credit.