Taxman plans to enforce fully digital billing and tax declaration mechanisms this year.
According to the Rwanda Revenue Authority (RRA) Commissioner-General Pascal Bizimana Ruganintwali, any expenses not supported by the electronically billed invoices will not be accepted during the declaration process of the income taxes and customs declarations of 2021.
Mr Bizimana noted that the move is in line with the Electronic Billing Machine (EBM) for all projects, under which all the taxpayers are required to fully employ Electronic Billing Machine.
“The management of Rwanda Revenue Authority informs all taxpayers that expense not supported by EBM invoices or customs declarations will not be accepted as deductible expenses during the income tax declaration for the period of 2021 as we roll out EBM for all project where all taxpayers will be obliged to issue ABM generated receipts” noted Bizimana in the letter to the taxpayers.
The new development, which has been envisaged as a way for maximising the body’s ability to collect taxes have followed the recently passed law that makes use of Electronic Billing Machines universally compulsory.
According to the law, the use of electronic invoicing methods, such as the use of electronic billing machines (EBMs) is among the legal requirements for all businesses except those exempted by the government.
Currently, the mandatory use of electronic invoicing is only required for businesses registered for Value Added Tax.
However, under the new development, any person carrying out any taxable business activity is forced to use the system.
“A person who carries out any taxable activity must issue an invoice generated by an electronic invoicing system certified by the tax administration,” added Mr Bizimana.
The taxman faces an uphill task of collecting revenues during the turbulent period caused by the global pandemic, and the use of the electronic billing it expects to efficiently collect more taxes.