Rwanda Revenue Authority (RRA) is not accepting bank notes and coins from tax payers in a move to speed up tax clearance in the country.

Eugène Torero, RRA deputy directors general said anybody paying tax of Frw500,000 and more has to be by cheque. This is part of the reforms RRA has embarked on, to ease doing business in the country.

Bank tellers would waste a lot of time counting notes and coins. This would cause delays and congestions in banking halls.

"Though the business communality was negative about tax clearance by cheque, they have started liking it,” Torero said on phone from Nairobi. He estimates that tax clearance time has reduced.

However, some traders are still opposed to the idea. Charles Gasana, a textile importer said cheque payment is not flexible.

"Once I am away on a business tour, leaving a cheque with workers is quit insecure and besides, we are not sure of how much we are to pay,” he explained.

But Tom Rwagatare, an electronic importer said that it makes no difference paying by cheque or cash. He asked RRA to be flexible.

"To us (traders), Frw500,000 is no big money but the cheque payment system is not flexible enough to some of us.”

Francois Kanimba, said the cheque payment system will check circulation of counterfeit notes in the economy.

"We are also encouraging RRA to request tax payers use orders so that money can always be transferred to the RRA account,” he said.

Kanimba said government has received $2.5 million (Frw1.4 billion) from the World Bank to finance electronic payment system in the country. This money will cover the whole project including technical assistance and software equipment.

A feasibility study will commence next month and by the end of this year, Rwanda will have embraced electronic payment system.

"We are in negotiation with SIMTEL to implement the system and this would be more efficient because it’s even cashless and paperless,” he added.

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