Catalyzing TIN Security: Kigali entrepreneur calls on peers to embrace TIN protection system
Nyandwi Pacifique, an entrepreneur based in Kigali, has rallied his fellow business peers to adopt the Taxpayer Identification Number (TIN) protection system. This comes after unidentified individuals illicitly exploited his TIN to purchase an array of liquors worth 67 million Frw.
This incident mirrors a prior case in which a local business person found himself blindsided when malevolent actors misappropriated his TIN to acquire merchandise totaling to approximately Frw 200 million.
The alarm bells started ringing for Nyandwi when Rwanda Revenue Authority (RRA) contacted him, seeking clarification about merchandise seemingly linked to his virtual inventory—a meticulous digital record upheld by the electronic invoicing system.
Nyandwi had no involvement in these transactions. "They claimed I had purchased numerous goods that were ostensibly found in my inventory. Yet, an inspection revealed that these items existed solely within the EBM stock. I must stress, however, that I have never purchased such a huge number of liquors," he exclaimed.
An audit conducted by RRA concluded that Nyandwi owed approximately Frw 6 million in taxes, beyond those already settled during legitimate trade transactions.
RRA has recently introduced a TIN security management system, allowing TIN holders to process a purchase code by dialing *800# whenever they purchase anything for reselling. Only with this code, issuance of invoices is valid, thereby minimizing the risk of unauthorized transactions.
Jean-Paulin Uwitonze, Assistant Commissioner for Taxpayer Services and Communication, said that the implementation of this cutting-edge code system arose from persistent complaints from taxpayers perturbed by the misuse of their TINs for unscrupulous transactions.
The Rwanda Private Sector Federation has also consistently advocated for a protective mechanism to shield business TINs from fraudulent activities—a call that resonated with the RRA's new approach.
"Although you might not have encountered this situation yet, it's possible it could arise in the future, compelling you to invest your time and resources in disproving your involvement in a transaction you never made,” he said.
“And remember, you'll need compelling evidence to substantiate your claim of innocence; otherwise, you might find yourself liable for the associated taxes," he added.
However, he said many businesses are embracing this progressive move. Out of an anticipated 90,000 businesses using EBM, more than 60,000 have adapted to it.
Uwitonze encourages every Rwandan citizen to willingly embrace tax compliance. He beckons all traders to stand vigilant against malpractices that are intended to evade taxes.