Rwanda Revenue Authority (RRA) has reminded business operators who opted to pay the trading license tax quarterly to settle the third quarter before the July 31 deadline to allow ample time for support for those who may need it.

Law nº 048/2023 of 05/09/2023 determining the sources of revenue and property of decentralized entities stipulates that the trading license tax is paid by any person who opens a business activity in a district.

While tax payers who have chosen to pay their whole annual trading license tax at once did so by January 31, those who chose quarterly payments are currently settling the third quarter.

Ernest Karasira, the Assistant Commissioner in charge of the Provincial and Decentralized Revenue Division at RRA, stated that those registered for the trading license tax and who have chosen to pay quarterly should do so early to ensure that anyone needing assistance can receive it in time.

"When we look at the numbers at our disposal of those who have declared, we find that they are still few. I really encourage them to declare early to avoid penalties for late declarations as the law provides. You can declare today and pay tomorrow, as long as you do not miss the deadline,” he said.

"It is simple; it is done online. You do not need to come to RRA offices to declare because you have your TIN and password. You can do it yourself in the system or approach agents to help you,” he added.

Karasira urged business operators to comply with their obligations, noting that the law was amended so that a person with a business having branches in one district pays the trading license tax for only one branch.

"Compared to the previous law, where each branch had to pay the trading license tax, this is a good thing this law has brought. Then, for those with different activities in one district, each activity pays the trading license tax independently,” he added.

When the business activities are in multiple districts, each business pays the trading license tax in the respective district. If all the branches are in the same district as the head office, the taxpayer pays the trading license tax according to the turnover of the head office. And when the branches are in a district other than that of the head office, the trading license tax is unique and calculated based on the turnover of the branch with the highest turnover.

The first quarter’s trading license tax is due by January 31, the second quarter by April 30, the third quarter by July 31, and the fourth quarter by October 31.

Under the new law, the trading license tax is calculated based on the turnover of the previous year, while the taxpayer who opens a business activity declares and pays the trading license tax based on the starting capital. The law provides the basis for the calculation of the trading license tax for profit-oriented activities based on their turnover and other profit-oriented activities.

Those exempted from the trading license tax include non-commercial public institutions and micro-enterprises and small businesses during the first two years following their establishment.

Once you have declared this tax, you receive a reference number to use in payment, and you can pay using various methods such as Mobile Money, Mobicash, or Online Banking.

A taxpayer who fails to declare and pay tax within the time limit provided by law pays such a tax and is liable to an administrative fine of 20% of the due tax if the time limit for payment extends for a period of time not exceeding 30 days; 40% of the due tax if the taxpayer pays within a period ranging from the 31st to the 60th day from the final date of payment; and 60% of the due tax if the taxpayer exceeds the time limit for payment by more than 60 days.