Private sector, RRA in tax debate
(The New Times, Thursday, December 22, 2011)
By Ivan R. Mugisha
PSF Chairman Faustin Mbundu (L) with the Commissioner General of Rwanda Revenue Authority,
Ben Kagarama at the forum yesterday . The New Times / J. Mbanda.
Ben Kagarama at the forum yesterday . The New Times / J. Mbanda.
Rwanda Revenue Authority (RRA) and the private sector yesterday engaged in a heated debate over tax regulations and facilitations that both parties had earlier agreed to put into practice to simplify trade.
During a meeting that attracted officials from RRA, Private Sector Federation (PSF), bankers, auditors, and entrepreneurs, it was observed that numerous resolutions made at a prior meeting needed to be implemented to eliminate barriers for easy taxation of private businesses.
PSF demanded for the rectification note for the sector to be put at five years, which calls for private business archives to be exempted from audits after five years from the time they were filed.
“We are proposing that documents such as inventories and invoices that are archived for a minimum of five years are exempted from revision by the tax authority. This will help businesses avoid legal uncertainties and help them move on quickly to other agendas,” Jean de Dieu Mbarushimana, the Director of Administration and Finance of Hotel Mille Collines said.
However; the RRA Commissioner General, Ben Kagarama, opposed the motion saying that ten years instead of five is the best for both the private sector and the tax authority.
“In a meeting with PSF and MPs, it was maintained that an audit is not carried out after ten years. I believe that it is also in the interest of healthy businesses with nothing to hide to provide access to their documents for reviewing whether it is after ten years or even 100 years,” Kagarama said.
“We know that some companies do not want to be reviewed or audited by credible bodies because they falsify documents and certifications. We know them and we know the people who walk around with stamps offering shady services. They understand the risks involved and when we get them, we shall punish them,” he warned.
Kagarama reiterated that RRA does not want to discourage businesses by implementing ambiguous laws, but has the objective to develop the economy and make companies more profitable, which in turn will enable RRA to gain through taxation.
“If RRA collects 500 billion today by forcefully extracting tax from businesses without consideration, it will frustrate investors and make the economy unsustainable. Therefore, I inform the private sector that our implementations seek to facilitate growth and make businesses operate professionally,” he added.
The Acting CEO of PSF, Yvette Mukaremwa, said that interactions between RRA and PSF had brought forth numerous achievements such as VAT law amendments and tax education.
She added that the private sector is not against health checks, but wanted them to be streamlined so as to avoid contradiction in laws and effects like double taxation that frustrate traders.
Other issues raised by the private sector included the application of flat tax rates on small business, which RRA replied that a thorough study is still under way by RRA and the World Bank after which the implementation of flat rates is expected to commence.
During a meeting that attracted officials from RRA, Private Sector Federation (PSF), bankers, auditors, and entrepreneurs, it was observed that numerous resolutions made at a prior meeting needed to be implemented to eliminate barriers for easy taxation of private businesses.
PSF demanded for the rectification note for the sector to be put at five years, which calls for private business archives to be exempted from audits after five years from the time they were filed.
“We are proposing that documents such as inventories and invoices that are archived for a minimum of five years are exempted from revision by the tax authority. This will help businesses avoid legal uncertainties and help them move on quickly to other agendas,” Jean de Dieu Mbarushimana, the Director of Administration and Finance of Hotel Mille Collines said.
However; the RRA Commissioner General, Ben Kagarama, opposed the motion saying that ten years instead of five is the best for both the private sector and the tax authority.
“In a meeting with PSF and MPs, it was maintained that an audit is not carried out after ten years. I believe that it is also in the interest of healthy businesses with nothing to hide to provide access to their documents for reviewing whether it is after ten years or even 100 years,” Kagarama said.
“We know that some companies do not want to be reviewed or audited by credible bodies because they falsify documents and certifications. We know them and we know the people who walk around with stamps offering shady services. They understand the risks involved and when we get them, we shall punish them,” he warned.
Kagarama reiterated that RRA does not want to discourage businesses by implementing ambiguous laws, but has the objective to develop the economy and make companies more profitable, which in turn will enable RRA to gain through taxation.
“If RRA collects 500 billion today by forcefully extracting tax from businesses without consideration, it will frustrate investors and make the economy unsustainable. Therefore, I inform the private sector that our implementations seek to facilitate growth and make businesses operate professionally,” he added.
The Acting CEO of PSF, Yvette Mukaremwa, said that interactions between RRA and PSF had brought forth numerous achievements such as VAT law amendments and tax education.
She added that the private sector is not against health checks, but wanted them to be streamlined so as to avoid contradiction in laws and effects like double taxation that frustrate traders.
Other issues raised by the private sector included the application of flat tax rates on small business, which RRA replied that a thorough study is still under way by RRA and the World Bank after which the implementation of flat rates is expected to commence.
