Manufacturers to apply for remission of duty in time
Manufacturers are urged to apply for remission of duty for raw materials they tend to import not later than 30th March 2021, so that their request is approved and included in the gazette during the next annual meeting of EAC Ministers of Finance. It was raised during the annual meeting between RRA and Local manufactures, held in Kigali on Wednesday 25th November at Lemigo Hotel.
“Approved by the EAC council of Ministers of Finance, remission of duty is a scheme aimed at facilitating manufacturers to import raw materials and industrial inputs at a reduced rate. However, applicants need to meet a number of requirements such as being a recognized manufacturer (for first time applicants), using EBM Version 2, having a valid Tax Clearance certificate, and having a filled request form with detailed list of items whose unit of quantity meets the standard measures of EAC common external tariff”, said Mr. Gahutu Emmanuel, Rwanda Revenue Authority (RRA) Head of Valuation, Tariff and Rules of Origin Unit.
“It’s vital for the manufacturers to understand this scheme in order to avoid requests for remission on items that are not necessary, and that being granted this facilitation does not exempt them from other taxes such as VAT on finished goods.” He added.
Besides understanding their rights and obligations, manufacturers also discovered new services and requirements introduced by the Government to facilitate them during the Covid-19 pandemic period. Among them include the online application system for Remission of Duties, as well as the exemption of Value Added Tax on essential goods like face masks and other medical related products. They also learnt how to access and use the newly introduced reporting form that they are required to submit quarterly.
According to the manufacturers, the meeting addressed so many of the challenges that they have been facing due to lack of knowledge of the procedures and requirements.
“This annual meeting is vital to us as manufacturers because it provides detailed information related to the tax obligations and rights in the manufacturing industry. Some of us especially new manufacturers invest in this industry just because they have heard of the remission of duties, and in the end, they face challenges when it comes to paying other taxes such VAT on finished goods”, says Shyaka Gakuba, Managing Director of CHANGJIANG International Industry.
Shyaka also adds that since this annual meeting was initiated in 2017, the industry has seen great improvement in the manufacturers’ tax compliance.
“As someone who has been attending this meeting for the past 4 years, I have seen tremendous growth in tax compliance from my counterparts in the industry, and this is due to the lessons we receive each year that passes”, He says.
Organized by RRA, this annual meeting aims at educating Rwanda Manufacturers on the law regarding Remission of Duties on raw materials, and allows both RRA and manufacturers to collectively identify the gaps and challenges that they encounter in the Remission of Duties application process and find solutions as a team.