Rwanda Revenue Authority (RRA) has announced new solutions that will allow taxpayers to access Electronic Invoicing Systems (EIS) — commonly known as EBMs—through mobile phones. The move aims to boost the accessibility, convenience and accuracy of the EBM services.

In addition to being mobile-friendly, the new EIS applications will provide web-based invoicing and online integration with taxpayers’ invoicing systems.

Plans are also underway to upgrade the system to a point where tax audit and tax collections would rely substantially on data analytics degenerated from EIS.

"Up until today, only business people with laptops were able to get the EIS application, and this was also possible for computers with Windows as the operating system,” said Emmy Mbera, the EBM Project Co-ordinator at RRA.

This, he explained, posed a challenge for the business people who couldn’t afford laptops and other expensive gadgets.

"Others also decried that they could afford other operating systems besides Windows,” Mbera added.

With the software currently diversified, Mbera argues that the move is expected to improve bookkeeping and Value Added Tax (VAT) compliance in the country.

"The gains are two-fold; we now have a solution for people with a smartphone. This system is installed in taxpayer’s smartphones. Issuance of EBM receipts is done through an SMS which contains all necessary information and a link that leads to the details of the receipt,” he added, "Eligible taxpayers for this solution are those whose annual turnover doesn’t exceed Rwf20,000,000.”

Also important, Mbera highlighted that RRA has introduced an ‘Online EBM solution’ as part of the new models.

"This internet-based EBM solution enables taxpayers such transporters, consultancy, rental services, lawyers…to issue EBM receipts whenever and wherever they are.”

Similarly, he pointed out, eligible taxpayers for this solution are those in the service sector whose annual turnover doesn’t exceed Rwf20, 000,000 and doesn’t issue receipts frequently.

From a tax administrator’s point of view, Mbera said, "Through this, we plan to improve transparency in tax administration and also meet the needs of small taxpayers.”

In addition, he said, the new solutions are expected to address challenges such as instances where EBM machines have previously been used by fraudsters attempting to swindle funds by using the machine’s invoices to claim value-added tax inputs against fictitious sales.

The process of replacing the Electronic Billing Machines with internet-based software was launched in 2018 after the revenue body said that the machines were based on outdated technology.

At the time, RRA said that the major challenges posed by the machines include maintenance and cost of service on the local market.

Unlike the old device, the new solutions will also serve to capture stock enabling balance of stock of sales, Mbera said.

This function, he said, will make it easier for taxpayers to declare their taxes as they will have access to their data.

It will also make it impossible for taxpayers to defraud RRA when declaring taxes as has often been the case, under previous systems.

Compliance

Much as the law stipulates that any person required to use an EBM who sells goods or services without issuing an electronic invoice is liable to an administrative fine of 10 times the value of the evaded VAT, Mbera called on the public to be drivers of the compliance aspect.

"RRA can build the system, but without compliance, it will not serve its purpose,” he added, "Clients should understand that they are the drivers of this. They should not accept products without an EBM invoice.”

According to Mbera, application and installation of one of the solutions above are provided for free to both VAT and non-VAT taxpayers.