Rwanda Revenue Authority-RRA has warned businesses to desist from hiding electronic Billing Machines-EBMs so that consumers may not ask for invoices which helps traders to evade value Added Tax-VAT.
Emmy Mbera, coordinator of EBMs at the tax body says that after intensifying efforts to ensure VAT registered tax payers use the machines and consumers at demand for invoices, traders hide the machines.
“When a consumer demands for an electronic invoice, they tell you they don’t have an EBM, then they give you a manual receipt,” he said on Wednesday in Nyagatare district in Eastern Province.
Other traders, Mbera says that they tend undervalue the prices of goods that are going to be printed on the invoice which means that the traders is likely to declare less VAT.
“The resistance against EBM still remains because businesses do not want to report to the tax administration their cash flows,” he added.
The government introduced Electronic Billing Machines in 2013 in an effort to curb down tax evasion mainly of value added tax which saw an increase of 6.5 percent in its collection.
“It’s not that we don’t want to use EBMs but most of the times they break down and you have to take them for repair or at times you don’t have airtime in it,” said James Mugabo, a trader in Nyagatare town.
The government has plans of distributing EBMs at a government rate which is down than the current market price that ranges between Rwf 300,000 to Rwf 450,000.
Accordingly, VAT registered tax payers who are not using the machines are charged Rwf 20 million for businesses with a turnover of Rwf 400 million and Rwf 500,000 with a turnover below.