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EBM campaign goes to UR-Nyagatare

Rwanda Revenue Authority takes EBM awareness campaign to the University of Rwanda, Nyagatare campus on 16 December 2015.

The function is part of the on going campaign in higher learning institutions aimed at explaining to students and academic staffs the value added tax mechanism and enhancing the culture of asking invoice for efficient VAT collection under the theme “role of EBM in promoting tax compliance.”

Wilson Mugabo, Director of administration and Human resources management commended RRA for the public lecture, as it gives relevant information to students and staff as consumers and taxpayers and helps students associate theories acquired in class and practice in taxation career to better allow students get aware of fiscal issues and national finances.

Taxes are the backbones of the national self reliance and reduce external dependence.

Emmy Mbera, EBM coordinator said that asking for EBM invoice is a contribution that every consumer can offer to help in VAT collection, adding that not asking for it is supporting non compliant business people evade taxes.

The EBM approach was introduced in Rwanda in 2013 to make the collection of value added taxes more efficient.

Reports indicate that VAT contribute between 30%-40% of the total taxes collected.

EBM came to replace manual invoicing for VAT registered taxpayers, those with twenty million of turnover annually or five million Rwandan Francs quarterly.

The tax administration says also that it targets to distribute EBM devices to all registered taxpayers at affordable price next year in order to ensure all business operations are controlled and information easily accessed though all will not be forced to VAT registration.

With the use of EBM, information is shared between the tax administration and the business person and information is kept with safety.

“Sharing information with RRA secures the business person, said Mbera.

Value Added Tax fixed at 18% is paid by the last consumer within the price of good and taxed services.

About 12,000 are registered to VAT and so far about ten thousand use EBM in their daily businesses.

Benefits of EBM are to the tax administration as well as to the business community.

EBM eases control of the tax administration and in case of VAT refund, information is easily found to allow quicker payment without further auditing processes.

It has also simplified audits processes and therefore reduce risks caused by manual invoices.

From business management perspective, as the EBM system is Electronic, it allows the business managers and owners to control their employees and stocks in an efficient and transparent manner, reducing cases of bribery and manoeuvering of business reports.

Electronic invoicing contributed an increase of over 6.5% of VAT collection, between March 2013 and September 2014 according to reports by the International Growth Centre (IGC).

However resistance against EBM remains among some registered taxpayers due to the fact that some do not want to report to the tax administration their cash flows and therefore confiscate the VAT collected from last consumers.

Some hide their EBM and continue to offer manual invoices, others underestimate the prices of goods and services among other malpractices arresting taxes to reach the national treasury.

Together with behaviour communication chance though EBM campaigns conducted in different areas, the tax administration remains vigilant against VAT evaders.

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