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Declare Motor Vehicle Income Tax
If you generate income from motor vehicle transport, you should prepare an annual tax declaration in accordance with procedures specified by the tax administration and submit your declaration not later than 31st March of the following tax period.
If you filed your income tax last year, you are automatically subject to IQP for the current year and forward. Regarding IQP, as a taxpayer you have to declare and pay by 30th June (For 1st Quarter), 30th September (for 2nd Quarter) and 31st December (for the 3rd Quarter) of the year of taxable business activities. A quarterly prepayment tax is calculated from the tax paid for the previous annual tax period divided by the turnover of the same tax period, times the current quarterly turnover.
IQP declarations for motor vehicle are declared using M-Declaration (Mobile phone declaration) by dialing *800# and follow instructions.
Declaration of Motor Vehicle Income tax can be done through E-tax system or by mobile phone using M-Declaration.
The process for declaring Motor Vehicle Income Tax using M-Declaration involves the following steps:
- Dial *800#
- Select the language, either English or Kinyarwanda
- Select 1 for Motor Cycles/Vehicles
- Put the Unique Taxpayer Identification Number (TIN) and the Number plate of the motor vehicle. (This is also applicable for a new taxpayer who is declaring for his/her first time).
- Select the tax year and quarter for the period which is being declared. (For example, for annual declarations that are due by 31st March 2024 are for the tax year of 2023 and quarter 4. For IQP declarations that are due by 30th June 2024 are for the tax year of 2024 and quarter 1.
After selecting the tax year/quarter, the system will show the Income Tax to be paid, and generates the RRA Reference Number required for paying the tax.
When you choose to make motor vehicle Income tax declaration via E-tax system, you must log in using your credentials (TIN and password). If you have forgotten your password, you can reset it by clicking on "Forgot password." After logging in to E-tax, you should click on "Motor Vehicle," select "MV-Declaration," and follow the instructions provided.
The penalties and fines for Motor Vehicle Income Tax are similar to other domestic taxes. The penalties are applied for taxpayers who commits the following wrongful acts:
- Late declaration
- Late payment
- Declaring less than the correct tax due
- Paying less than the tax due declared
1.Penalties for late declaration
Late filing penalties are as following based on turnover
- Taxpayer with turnover between 2-20M: 50,000 Frw
- Non-profit entity, Public institution and Taxpayer with turnover less than 20 M: 300,000 Frw
- Large taxpayer: 500,000 Frw
2.Interests for late payment
A taxpayer who fails to pay tax within the period provided for by the Law pays late payment interests on the amount of principal tax as follows:
| Percentages (%) | Time of delay |
| 0.5 %
| If the taxpayer has recorded a delay not exceeding six (6) |
| 1 %
| If the taxpayer has recorded a delay of six (6) months in tax |
| 1.5 %
| If the taxpayer has recorded a delay of more than twelve (12) |
Interests for late payment are non- compounding and calculated on a monthly basis counting from the first day following the day on which the tax would have been paid until the day of payment inclusive. Every month that begins is considered as a complete month.
Interests for late payment cannot exceed one hundred percent (100%) of the amount of tax.
When the taxpayer pays, that payment offsets the tax liability in the following order:
- principal tax;
- administrative fine;
- interests for late payment.
3.Administrative Fines
The following wrongful acts are punished with fixed administrative fine:
- Failure to submit a tax declaration on time;
- Failure to provide proofs required by the Tax administration;
- Failure to cooperate or not to provide information during a tax audit;
- Failure to communicate the capacity or appointment of a representative;
- Failure to keep books and records of controlled transactions;
- To obstruct or attempt to obstruct the activities or duties of the Tax administration;
- Failure to submit financial statements by a person with obligation to submit its financial statements for taxation purpose;
- Failure to provide on due time, fail to provide information or provide incomplete, incorrect or misleading information following a request of the Tax administration;
- Failure to make timely quarter payment on profit tax.
The Administrative fine related to violations of the above provisions is established as follows:
| Fixed fines | Concerned taxpayer |
| Frw 50,000
| For a person not engaged in any commercial activity or a taxpayer whose annual turnover is more than two million Rwandan francs (FRW 2,000,000) but not exceeding twenty million Rwandan francs (FRW 20,000,000). |
| Frw 300,000
| If the taxpayer is a public institution or a non-profit making organization and if the taxpayer’s annual turnover exceeds twenty million Rwandan francs (FRW 20,000,000). |
| Frw 500,000
| If the taxpayer was informed by the Tax Administration that he or she is in the category of large taxpayers |
| Frw 500,000
| If the taxpayer fails to submit his or her certified annual financial statements as required by law. The fine is paid every month until he or she submits them; |
Any person who fails to provide information on time, one who does not provide information or who provides incomplete, incorrect or misleading information following a request of the Tax Administration is liable to a penalty fixed as follows:
| Fixed fines | Concerned taxpayer |
| Frw 500,000
| For a person who has an annual turnover equal to or less than twenty million Rwandan francs (FRW 20,000,000). |
| Frw 2,000,000
| For a person who has an annual turnover exceeding twenty million (FRW 20,000,000) but less than two hundred million Rwandan francs (FRW 200,000,000). |
| Frw 3,000,000
| For a person who has an annual turnover equal to or more than two hundred million Rwandan francs (FRW 200,000,000) but less than six hundred million Rwandan francs (FRW 600,000,000). |
| Frw 5,000,000
| For the person with an annual turnover equal to or more than six hundred million Rwandan francs (FRW 600,000,000). |
The basic administrative fine is doubled or quadrupled when offenses are repeated for the second time or third time in two (2) years.
A qualified professional approved by the Tax Administration who obstructs the activities of the Tax Administration is liable to an administrative fine of two hundred thousand Rwandan francs (FRW 200,000).
The qualified professional approved by the Tax Administration may also be suspended from his or her duties by the Commissioner General for a period of two (2) years.
NON-FIXED ADMINISTRATIVE FINE
A. Administrative fine for non- declaration and non-payment of tax on time
A taxpayer who fails to declare and pay tax within the time limit provided by law pays such a tax and is liable to an administrative fine as follows:
| Percentages (%) | Time of delay |
| 20 % of due tax
40 % of due tax
| If the time limit for payment extends for a period of time not exceeding thirty (30) days. 40 % of due tax |
| 60% of due tax | If the taxpayer exceeds the time limit for payment by more than sixty (60) days. |
A taxpayer who declares tax due within the time limit provided by law but who does not pay that tax in the prescribed time limit, pays the principal tax and an administrative fine as follows:
| Percentages (%) | Time of delay |
| 5% of due | When the taxpayer exceeds the time limit for payment for a period not exceeding thirty (30) days from the final date of payment. |
| 10 % of due principal tax | If the taxpayer paid within a period ranging from the thirty-first 31st to sixtieth (60th) day from the final date of payment. |
| 30% of due principal tax | If the taxpayer exceeds the time limit for payment by more than sixty (60) days from the final date of payment. |
A taxpayer to whom the Commissioner General granted extension for submitting tax declaration is not subject to administrative fine unless the taxpayer failed to respect the extension period.
B. Administrative fines for declaring less than the correct tax due
A taxpayer who rectifies his or her tax declaration and pays relevant tax before he or she is notified of imminent audit of his or her tax is not subject to the administrative fine for
understatement but he or she is liable to late payment fines.
A taxpayer who submits a declaration, and is found by RRA to have declared lower tax due that is more than 10% of the correct amount but less than 20% of the correct amount, he is subject to an administrative fine of ten percent (10%) of the amount of the understatement.
A taxpayer who submits a declaration, and is found by RRA to have declared lower tax due that is more than 20% of the correct amount, must pay the difference and is subject to a fine of 20% of the amount of the understatement.