Rwanda’s Traders Want VAT On It Equipment Scrapped
Business was booming until November last year. But now, dealers in IT equipment are crying foul over the Value Added Tax (VAT) imposed by Rwanda Revenue Authority (RRA).
The traders have threatened to treat their stocks that are piled at Magerwa as transit cargo to neighbouring countries like Burundi and DR Congo, where they will not be taxed.
The president of the stationery dealers in the country, Bernard Urayeneza, told Business Times that the country was enjoying tax-free imports on IT equipment like computer accessories, printers, toners and cartridges as part of government's policy to boost the ICT sector.
While traders in other EAC member States are exempted from paying VAT on imported IT equipment, Urayeneza said that, in November last year, RRA slapped a VAT charge of 18 per cent VAT on the same products.
"This is unfair treatment, we are in the East African Community and other member countries do not charge VAT on the same products with in the region," he said.
Surprisingly, he added, when laptops are imported together with printers, they do not pay tax but once it is only printers, the tax body charges them.
"How do you separate a cartridge from a computer?" he questioned.
Through their president, the traders said that RRA should have communicated its policy shift in order to avert possible revenue losses because of the anticipated decline in demand as dealers plan to hike prices.
"It is going to cost business dearly; they (RRA) should have announced that the grace period for tax exemption on computers and accessories is over. This way we would alert our clients too," Urayeneza emphasized.
He tasked the tax body to come out boldly and explain the changes to the business community.
He also drew attention of the new list of goods from different parts of the world where many traders import from with different prices.
Currently, importers pay taxes depending on their original prices where after RRA gives them a query with the amount depending on their test value.
"How could this be possible and applicable, the prices quoted are double than our prices, and valued in dollars," a traders who preferred anonymous said.
The test value, he said, is creating a double loss both to their clients and goods stranded in Magerwa.
When contacted for comment, RRA's Deputy Commissioner and Commissioner for Customs, Richard Tusabe, said the claims were not true and that his office intends to issue a statement on the matter today.