The Rwandan legislature created the Rwanda Revenue Authority (RRA) to be in charge of tax collection. The Rwanda Revenue Authority (RRA) is responsible for enforcing, assessing, collecting, and reporting on all taxes levied within Rwanda. Rwanda Revenue Authority House, in the Kimiruhura district of Kigali, serves as the organization’s headquarters. RRA also has regional offices throughout the United States. Organizational headquarters are located at 01°57’10.0″ South and 30°05’05.0″ East (Latitude:1.952778, Longitude:30.084722). The Rwanda Revenue Authority was established in 1997 after a law was enacted by parliament, although it didn’t start collecting taxes until 1998. RRA operates under the direction of the Rwanda Ministry of Finance and Economic Planning. When RRA first opened its doors in 1998, it had 200 staff who needed education and tools to do their jobs. There needs to be a clear chain of command and well-defined departments to run an effective organization. It was projected in May 2017 that the tax agency would collect more than RWF:1 trillion (about US$1,215,000,000) in the fiscal year ending in June 2017. There were 168,346 taxpayers under the agency’s care back then. The tax agency continues to face issues in areas such as non-compliance on the part of large business clients and the recruitment and retention of competent, experienced personnel.
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Administration
The Commissioner General is the organization’s top executive; the incumbent, Pascal Bizimana Ruganintwali, was chosen by the President of Rwanda with Senate approval and will serve a five-year term that can be extended once.
Signing up as a Taxpayer
Within seven (7) days of starting a business or other potentially taxable activity, all new business owners must register with the Tax Administration. The Rwanda Development Board (RDB) provides convenient online services (https://rdb.rw/e-services/) for registering a corporation controlled by an individual or a group of individuals. This service is instantaneous and cost-free. The RDB certificate is issued following the firm registration process. Business registration is handled by RRA, and a Taxpayer Identification Number (TIN) certificate is granted at no cost at any of the agency’s many locations across the country. Each of Rwanda’s thirty provinces is represented by an RRA office. Within seven (7) days of the end of each fiscal year or quarter, taxable businesses with a turnover of more than Twenty Million Rwanda Francs (Rwf20m) or Five Million (Rwf5m) are obliged by law to register for Value Added Tax (VAT). In light of the foregoing, any company that has registered for VAT is obligated to acquire an EBM immediately, as fines apply for either producing a non-electronic invoice or issuing an invoice that does not comply with the electronic format. Companies that don’t qualify for VAT automatically might voluntarily register and get EBM to comply with the legislation. Within seven (7) days of the date of the notice, the taxpayer must inform the tax administration in writing of any changes relating to the taxpayer or the taxpayer’s line of business. The Commissioner General offers directives on who must be registered as a business or organization, and how to remove registration for those who no longer operate as a business.
The privileges of a corporation
- A tax clearance certificate is required before engaging in income-generating activities.
- The Legal groundwork for the Quitus Fiscale.
- Input into the tax administration, useful for tax-related education.
- Where title to personal property is transferred.
Duties of a legally operating company
The following are the responsibilities of a registered business:
Government-wide taxes
Individuals and businesses alike are required to file various tax returns, including those for:
- Personal Income Tax (PIT).
- Corporate Income Tax (CIP).
- Value Added Tax (VAT) (if applicable).
- Pay As You Earn (PAYE) (if applicable).
- Consumption Tax (if applicable).
- Withholding Tax (if applicable) in the amounts of 3% and 15%, respectively.
Payment in full of all declared taxes is due without delay.
Indirect taxes
These include trade license fees, fixed assets tax, rental income tax, and cleaning fees. They are among the taxes and fees that must be paid.
Receipt for payment of taxes
The Revenue Recovery Agency (RRA) may award a taxpayer a tax clearance certificate if the taxpayer can prove that they owe no taxes to the Revenue Recovery Agency. Bids on public contracts, requests for bank credit, additions or deletions to the commercial register, changes to the destination country for products at customs, and many other business-related processes all require this certificate. The SIGTAS computer system software, which was deployed by RRA, analyzes taxpayer information so that a tax clearance certificate can be issued to the taxpayer the next business day. If a taxpayer owes back taxes to the RRA, they will receive a Tax Indebted Certificate. However, the RRA, to help businesspeople out, allows for an agreement on how and when this debt will be settled, and then, once all is settled, the taxpayer is encouraged to take part in government bids.
