I am responding to the article published in Business Times of June 2, and the subsequent letters to the editor published in The New Times of June 3 in which all authors were expressing concern about heavy penalties imposed on taxpayers who don't use Electronic Billing Machines (EBMs).
First off all, let us remind ourselves of the reasons behind the introduction of e-billing machines; EBMs are used to issue tax receipts and automatically calculate value added tax owed by businesses. They are also used to control sales and stock by processing and storing invoices.
The machines are also meant to modernise sale outlets with new management tools and combat unfair competition among taxpayers. For instance, there are some taxpayers who were not issuing receipts as required, yet there are those that were genuinely paying their taxes to the tax administration.
In addition, with the use of EBMs, one can easily monitor a multiple branch operations and manage stock, thus limiting the chances of mismanagement and fraud by unscrupulous employees.
You can also easily get your books of accounts correct at all time, thus making tax payment and computing easier than ever before.
Not forgetting the fact it also eases the process of VAT refund for qualifying taxpayers.
As mentioned earlier, the government implemented the use of electronic billing machines to discourage some taxpayers who were fond of keeping two receipt books or non-issuing tax receipts to clients, irrespective of the quantities bought, which encouraged tax evasion.
There was a widespread outcry by traders from the provinces who were accusing their suppliers in Kigali city of refusing to issue them receipts for the commodities bought.
This practice was making it hard for upcountry businesspeople to declare and pay taxes, especially VAT.
The introduction of EBMs was, therefore, seen as an answer to address such problems, which were also creating an unfair market competition.
It is also important to note the introduction and implementation of e-billing machines was done in consultation with the taxpayers and the Private Sector Federation.
The exercise was also done in phases to give taxpayers enough time to clearly understand how the machines operate and also to allow them ample time to integrate their EBMs into their systems to avoid interruptions in their operations.
The tax body has been engaging taxpayers throughout the implementation process, visiting their premises to advise and guide those who might be facing challenges adapting the method. Not only that, the law establishing the use of EBMs exempts taxpayers who do not issue 30 invoices annually, thus giving many micro and small taxpayers a window to use other modes of tax payment.
Therefore, the penalties slapped on defaulters should not be the issue here; they are only meant to discourage some taxpayers who may want to evade taxes intentionally. This is contrary to Article 24 of law no.37/2012 of 09/11/2012 establishing the Value Added Tax, providing for the use of EBM for all VAT-registered persons that generate invoices indicating the tax. Article 9 of the Ministerial Order N002/13/10/TC of 31/07/2013 gives the modalities of using certified electronic billing machines.
So, it is in every taxpayer's interest to use the e-billing machines in accordance with the existing laws and regulations, to avoid suffering penalties. One can always request for exemption in case they are eligible and seek for support from the tax administration, whenever they face any challenges.
The writer is the head of media and customer relations at the Rwanda Revenue Authority