To enhance compliance of Small and Medium Enterprises (SMEs) and reduce the ever rampant informal sector, Rwanda Revenue Authority (RRA) is set to launch the Block Management System (BMS) in August.

The new system, which was supposed to be launch at the end of June 2009, targets small taxpayers by demarcating areas in which they conduct businesses into sizeable and manageable blocks.

"Due to technical and administrative issues we have extended the launch to next month,” Gerald Nkusi Mukubu, Director Taxpayers services said in interview with The Business Times on Wednesday.

He said that the system would be operational in Kigali first before it is rolled out to other parts of the country.   

Mukubu pointed out that RRA has to set up fully equipped blocks to ease the process of paying tax.

"The process requires a lot of logistics because we are going to set up a whole new system in place,” he said.

The new offices will also be connected with internet services to allow the whole process of tax administration be carried out at the respective tax blocks.

According to Mukubu, the BMS will address tax related issues that limit business growth and tax compliance.

"Increased tax compliance will reduce tax penalties and also increase government revenue,” he explained.

Unlike the old system where tax administration has been centralised at the RRA headquarters, the new system will see tax administrators coming to the tax payers in their business location. 

RRA has identified three blocks for the new management system within Kigali City and their corresponding political demarcations to the extent that each district will have its own block with sub-blocks.

Under the BMS, each block does all the tax function of registering, assessing, collection and accounting for revenue.

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