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Registration, taxpayer’s benefit and responsibility

Cutting down the number of business informal sector is always identified as solid strategy and a way to establishing a secured and growing economy in any country. In this move, registering all businesses is the Government’s main focus in this financial 2014-15 year. In an entrepreneurship oriented state like Rwanda, registering a business is not only a law fulfilment; it’s also a way of enabling it to expand and blossom because businesses are widely encouraged and different incentives are given only to registered business people. Any person, who starts up a business or other income generating activities, is obliged to register with the tax administration within a period of seven days from the beginning of the business. Is also obliged to register for Value Added Tax (VAT) in seven days, any person who carries out taxable activities exceeding an annual turnover of twenty million Rwanda Francs (20,000,000 RWF), or five million Rwanda Francs (5,000,000 RWF) quarterly. Registration is done at any RRA Office, but when it comes to register a new business, a Taxpayer must also register it through the Rwanda Development Board (RDB) and get a registration certificate. In a bid to facilitate taxpayers, the RRA and RDB combined registration systems so that a Taxpayer Identification Number (TIN) can be issued at the same time of business registration at RDB. After registration at RDB, the taxpayer gets a Registration Certificate with a TIN referred to as the “company code” on the right-top side of the registration certificate. Business registration at RRA is free. In order to register, a businessman have to carry with him a copy of his Identity Card and one passport photo, and registration is done in five minutes! De-registration process has also been provided; this may happen in case for instance a Taxpayer decide to stop his business. In this case he first write a letter to the Commissioner for Small and Medium Taxpayers or Commissioner for Large Taxpayers depending on the category of the taxpayer. The registration office analyse your de-registration request and if approved they call him/her to complete required de-registration procedures. A de-registering taxpayer will then be asked to file returns for the previous period: annual declaration (and payment if applicable) for Profit Tax and Monthly or Quarterly declaration (and payment if applicable) for VAT and Pay As You Earn. He will finally be requested to fill two de-registration forms and get them signed and stamped from the Tax administration. One copy will be kept by the Tax administration for Official use, and another one kept by the Taxpayer for personal record. Registration is also important because the law provides penalties to business persons who fail to register. Penalties vary from 100.000 to 500.000 Rwandan francs. The Web Editor

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