Gasabo: RRA training on Withholding tax to renovate attitude of Accountants on public tenders
Kigali, Thursday 27th August 27, 2015:
Rwanda Revenue Authority intensifies training on withholding taxes to public tender committee members, accountants and managers of public institutions working under Gasabo district.
With the training, participants noted that they are going to update ways of doing things related to public tenders and withhold taxes as required by the law.
Taxes to be withheld include Withholding tax on winnings, Withholding tax on imports, Withholding tax on other payments(Interests, Dividends, Service fees, ….), Pay As You Earn, withholding tax on goods supplied by non-registered with tax administration, Withholding tax of 3% on public tenders, VAT withholding on public tenders.
Public officers working in public institutions in Gasabo districts were called to strictly observe the laws in order to ensure good management of public wallet and make sure that no service rendered to the public without withholding tax before payment is made to the supplier.
According to Ernest Karasira, head of taxpayer education at RRA, before any payment, a withholding tax of 3% on the value of invoice received excluding VAT is deducted, the filing and payment is done within 15 working days after the tax is withheld.
However, when the supplier has a “Quitus fiscal”, withholding tax of 3% is not withheld.
In case the payment is made to a supplier who is not registered to taxes, a withholding tax of 15% is deducted before any payment.
The law stipulates also that the public institution which awarded the tender must also withhold VAT, file a tax declaration and pay VAT withheld within 15 days following the month in which the invoice has been received. Failure to withhold or to pay tax withheld is subject to fine and interest.
Administrative penalties for failure to declare and pay on time all the above withholding taxes include 100,000 Frw for turnover less than 20 million, and 300,000 Frw if public institution, Nonprofit making organization or having a turnover greater than 20 million or 500,000 Rwf for large taxpayer.
Accountants say they ignored some practice concerning withholding tax, noting that after the training too much attention will be paid to observe the law.
Solange Ingabire, accountant for Gasabo district commended training by RRA saying that it will allow to different accountants to work more according to the law.
She indicated that some points were not taken into consideration while offering small public tenders but that they have understood the essence of public tender and withholding tax.
“We have understood that at any public tender there is tax to be withheld,” Ingabire pointed out.
His colleague, Jean Claude Niyonsaba, accountant for Kimihurura sector also indicated that they used to withhold tax on big tenders and ignore small ones, vowing that the training will help them accomplish their duties in a more lawful way.
For pubic managers once the fines are to be applied to the institution due to failure to comply, the officer in charge is responsible of the loss and repercussions like payment of loss or other administrative sanctions might be applied.
RRA puts much emphasis on tax education as a way of increasing tax compliance among different sectors of taxpayers, key to the development of the national economy. RRA is mandated to assess, collect and account for revenues to drive the country from a poor to a middle income national as well as having Rwanda fully financing the national needs.