Government announces new measures on VAT rewards and voluntary disclosure to encourage tax compliance

Buyers in Rwanda will soon benefit from the Value Added Tax (VAT) system as they request Electronic Billing Machine (EBM) invoices.

This is one of the key areas addressed in the ministerial orders determining modalities of the rewards based on the Value Added Tax (VAT) and the conditions to benefit from voluntary disclosure incentives. These ministerial orders, approved by the cabinet meeting held on 27 February 2024, are anticipated to boost tax compliance and improve business practices in Rwanda.

According to the Ministerial Order, a consumer who requests and is issued with an EBM invoice, is eligible for a reward of 10% of the VAT amount shown on the issued invoice. If a consumer is denied the invoice, and informs the tax administration, they are eligible for an additional reward equivalent to 50% of penalties paid on that invoice.

Additionally, individuals or businesses who voluntarily disclose their overdue taxes to the Rwanda Revenue Authority (RRA) before receiving any notification of impending tax issues will have their penalties and late payment interests waived, subject to an assessment by the tax administration.

Speaking at the post-cabinet press conference, the Minister of Finance and Economic Planning Dr. Uzziel Ndagijimana, alongside the Commissioner General of RRA, Pascal Bizimana Ruganintwari, highlighted that the two ministerial orders will allow existing mechanisms to broaden the tax base while reducing the burden on taxpayers. “Thanks to several reforms put in place, Rwanda has made significant progress in effective tax collection and increasing tax compliance. However, a lot more still needs to be done. These ministerial orders seek to streamline our efforts towards better and more efficient tax collection to build our country’s economy.” Minister Ndagijimana said.

The approved ministerial orders will come into effect after being published in the Official Gazette. (End)