Rwanda taxman introduces new electronic billing system

Rwanda Revenue Authority (RRA) has recently introduced a new electronic billing system to streamline tax collection and enhance compliance among taxpayers. The move comes in the wake of growing concerns about overbilling by Electricity Distribution Companies through estimated billing systems. The lower chamber of the National Assembly is on the verge of criminalizing the issuance of estimated bills to consumers, prompting a much-needed shift towards more accurate and transparent billing processes. To shed light on this innovative development, George Etomi, Director of Eko Electricity Distribution Company, sat down with CNBC Africa for an insightful discussion. The RRA has introduced various software-based Electronic Billing Machine (EBM) solutions tailored to different types of taxpayers. One of the key solutions is the EBM software version designed for Dante taxpayers who already possess a computing system, be it a laptop or a desktop. This system is voluntary and free for all Value Added Tax (VAT)-registered taxpayers, with potential plans to extend the service to non-VAT-registered taxpayers in the future. The new system requires internet connectivity, prompting concerns about technology adoption and internet literacy in Rwanda. However, RRA assures that internet penetration and coverage in the country are steadily improving, with over 90% coverage of 4G or 3G networks. Given that nearly all taxpayers already use internet-based solutions like E-tax for filing taxes, connectivity issues are expected to be minimal. In addition to the EBM, RRA has implemented other technological solutions to enhance tax compliance. The E-tax platform enables taxpayers to file and pay taxes online, with a mobile declaration feature catering to small taxpayers who can conveniently use their smartphones for tax transactions. Moreover, the customs sector benefits from the single window system and the cargo tracking system, which allows for efficient monitoring of goods in transit. RRA aims to reduce the cost of tax collection by 2% over the next five years, and the new EBM system is poised to play a crucial role in achieving this target. The system facilitates compliance monitoring, empowers taxpayers to meet their requirements easily, and aids in auditing processes, particularly for Value Added Tax (VAT) refunds. Through enhanced data collection and streamlined processes, RRA anticipates improved efficiency in tax collection and compliance oversight. Despite leveraging technology for tax management, RRA is cognizant of potential negative consequences that come with technological advancements. To mitigate risks, the authority has implemented stringent security measures and monitoring mechanisms to safeguard against cybersecurity threats and system breaches. Through proactive measures and continuous monitoring, RRA aims to uphold the integrity and reliability of the new electronic billing system, ensuring a smooth transition to a more efficient and transparent tax collection framework.