The money accrued from recovered taxes and penalties levied on intercepted smuggled goods between January and September this year.
At least 70 percent of the seized smuggled goods were secondhand clothes locally known as caguwa, according to the CO of the Rwanda National Police unit – RPU – attached to Rwanda Revenue Authority (RRA) to fight fraud and smuggling, among others.
Following the increase of taxes on second hand clothes from $0.5 to $2.5 per kilogramme, as part of the national programme to promote locally produced goods under the brand ‘Made in Rwanda’, fraud and smuggling of caguwa has shoot up.
Between February and May alone, RPU intercepted over 80 tons of secondhand clothes, according to statistics.
“Besides caguwa, Ibitenge – traditional attire – soft and alcoholic drinks especially expensive liquors, cooking oil, powdered milk and vehicle spare parts are other commodities that are commonly seized,” SSP Businge said, attributing the success to information from the people.
“We have intensified operations, checkpoints along mapped routes but also increased awareness which has strengthened our working relations with the people through information sharing, either from the loading points even in neighboring countries where the illegal practices are orchestrated or at the final destination where they are noticed as they are being off-loaded,” Businge said.
It is said that bundles of second hand clothes are concealed in rice, maize and cassava flour sacks.
“We are able to know all these tricks because of the good partnership with the people.”
The CO also warned traders, who attempt to evade taxes by under-valuing goods or manipulating electronic billing machine, where less of the sold goods are billed.
Emmy Mbera, the coordinator of Electronic Billing Machine (EBM) in RRA, appealed to the public to always demand receipts owing to the fact that taxes or Value Added Tax is paid by the end user – the buyer.
“The end user is the one who pays VAT not the seller; the seller is just like a broker between the buyer and the government. If the buyer doesn’t demand the receipt, then he or she is not sure if their financial contribution in national development has been delivered. These are public funds that should just be delivered, because contrary to that, it’s more like embezzlement, which you will be forced to pay with other penalties as the law states,” Mbera warned.
Article 24 of the law on VAT, obliges all VAT registered taxpayers in Rwanda to acquire and use EBM to issue tax invoices to their customers on every transaction they make. Failure to comply is a tax crime that attracts penalties.
The same law states that any person required to use EBM but sells goods or services without issuing an electronic invoice faces a fine of ten times the value of the evaded VAT. However, the fine is doubled if one commits the offence for the second time.
In article 200, any person with uncustomed goods shall be liable to an imprisonment not exceeding five years or a fine of 50 percent of the dutiable value of the goods involved, or both.
Additional penalties include the closure of business activities for a period of thirty days and being barred from bidding for public tenders, among others.
Under the East African Community Management Act, in article 199, the driver caught for fraud or smuggling goods, is slapped a fine of US$5000 while the vehicle and the goods are auctioned.
Currently, RRA is auctioning vehicles and goods that were intercepted in such fraudulent acts, over the past years.
Owing to the fact that the City of Kigali constructed seven modern health centres at a tune of about Rwf1.9 billion, it means that the recovered taxes can construct about five other health centres.
“When you buy a product, know that you have paid VAT but not the seller. Demand a receipt and ensure that all that you bought is accounted for on the receipt, that way you will be sure that your contribution will be delivered.”
Robert Mugabe, the Deputy Commissioner for Revenue Investigation & Enforcement Department, also said that the increased operations by RPU have significantly minimized on revenue losses by deterring, detecting and preventing smuggling, and tax evasion.
Source: RNP News
