Traders who refuse to install or use electronic billing machines face heavy penalties, the Rwanda Revenue Authority (RRA) has warned.

The e-billing machines help in automatically calculating value added tax (VAT) owed by businesses to RRA, as well as controlling sales and stock by processing and storing invoices.

The tax body provided free machines to 800 traders in the pilot phase, but the rest of the business community are required to buy their own equipment.

Over 77 per cent of the targeted tax-payers had started using the e-tax platform by the end of July despite the low enthusiasm that has characterised the exercise at the beginning. 

Of these, 400 were big tax-payers and 1,800 small-and-medium enterprise operators.

According to RRA officials, installation of the machines in several parts of the country was not done smoothly because several investors shunned them despite being mandatory to all VAT-registered tax-payers.

"Some traders who do not want to have the machines installed at their businesses are giving a hard time. Though we notified them, they came up with excuses and some even closed their businesses on the days we were supposed to install the machines,” Placide Kibogo, the RRA EBM technician, said.

Whereas some traders out rightly rejected the billing machines, others refused to be trained how to use them, according to Kibogo.

However, in a meeting last week, some of the traders refuted the claims, arguing that the machines do not function properly. Others said they already had alternative invoicing systems and do not need another one.

"We accepted the machines, costly as they may be. They operate with a fixed airtime of Rwf4,000 per month and when it is used up, they do not give notifications. So, when RRA officials find them off, they conclude that we do it deliberately,” Redempta Dusabyimana, a beverage distributor, said.

Nzaramba Claude, who works with Champions Technology, said: "The machines that were provided by RRA are of poor quality and always break down. We were told that the invoices they provide last for years, but they fade within a few months that one cannot even see the figures.”

RRA contracted Permagon Group, a Kenyan company, to install the machines. The tax body advised traders who are dissatisfied with the machines’ quality to buy their own from other RRA accredited distributors.

"The law is very clear on this; any person who is required to use a certified electronic billing machine and fails to do so shall be liable to a fixed administrative fine,” Dorcelle Mukashyaka, the RRA deputy commissioner in the taxpayer service department, said.

"We will start inspecting businesses to check whether users of electronic billing machines are issuing certified receipts and whether they comply with the regulations.”

According to the tax law, large tax-payers who fail to use the billing machines shall pay a fine of Rwf20m, while medium tax-payer shall pay Rwf10m.

Small and micro taxpayers pay Rwf5m and Rwf1m fine, respectively.