RRA should tax viable businesses

Editor, THIS IS in reference to the article, “RRA concerned as traders shun billing machines” (The New Times, May 28). I sympathise with the problems Rwanda Revenue Authority (RRA) faces in fulfilling its mandate to expand an extremely narrow tax base in line with the country’s goal of reducing our dependence on foreign donors to fund critical government operations and infrastructure. However, the only way this can be achieved in any sustained manner cannot be to kill our nascent businesses in their eggs by taxing them before they make a profit, grow and become sustainable themselves. Taxing a business before it has become viable is the best way of killing it and therefore ensuring that you will never be able to really expand the tax base in any realistic manner. The RRA should understand that people will not adapt to new ways of doing business unless you provide them with incentives and disincentives aimed at encouraging higher and more rapid adoption of this business approach. Most household-based micro, small and medium-sized businesses are highly suspicious of procedures whose purpose is not to increase their turnover and profits. Unless the tax body can demonstrate the advantages for businesses to incorporate the use of these billing machines into their business procedures, the tax body will harangue, threaten and sensitise until it is blue in the face, but take-up will remain very low. I agree with the RRA’s strategic objective, but it needs to seriously rethink its operational and tactical approach to this issue, most especially to make the machines business-friendly rather than a way of subcontracting its tax-collection function to businesses with little, if any, incentive to undertake that function. Mwene Kalinda, Rwanda

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RRA should tax viable businesses