The Rwandan government has instituted a Ministerial Order outlining the procedures and terms for taxpayers to take advantage of specific voluntary disclosure incentives. This Ministerial Order, numbered 001/24/03/TC and dated March 8, 2024, was sanctioned by the Cabinet during its meeting on February 27, 2024, and later officially published.
Summary
Under the newly introduced Ministerial Order No. 001/24/03/TC, Rwandan taxpayers are afforded an opportunity to voluntarily disclose historical undisclosed or unpaid tax liabilities within a limited three-month period. This window, operational from March 22, 2024, until June 22, 2024, targets individuals, companies, and organizations aiming to bolster overall tax compliance.
The voluntary disclosure initiative extends to all tax categories except customs duties, pertaining to periods preceding the tax year spanning January to December 2023. Here’s a breakdown of the essential provisions outlined in the gazetted Ministerial Order.
Simple Breakdown
Scope of Application (Article 1)
This Order is applicable to:
- Registered taxpayers voluntarily disclosing and settling previously unpaid tax liabilities before receiving notification of an impending audit.
- Unregistered taxpayers voluntarily disclosing and settling their tax dues.
- Registered taxpayers revealing and settling tax liabilities post the audit deadline.
- Registered taxpayers not covered in the aforementioned categories, who voluntarily disclose and settle tax obligations within the stipulated voluntary disclosure period.
Requirements for Voluntary Disclosure (Article 2)
Applicants for voluntary disclosure must specify:
- The relevant tax type and corresponding period.
- The amount of tax owed, supported by relevant documentation.
It’s important to note that voluntary disclosure does not entitle applicants to any refunds of input tax or tax credits. Additionally, the disclosed tax period mentioned in Article 2 must correspond to at least one period preceding the tax year of January to December 2023.
Modality of Voluntary Disclosure (Article 4)
Taxpayers seeking to disclose and settle previously unpaid taxes must utilize an online system, eTax, established by the Tax Administration for this purpose.
Time Limit for Decision Communication (Article 5)
The Tax Administration is mandated to evaluate voluntary disclosure applications within 30 days from receipt and communicate its decision accordingly.
Tax Payment (Article 6)
Beneficiaries of voluntary disclosure incentives are required to settle the disclosed principal tax amount within 30 days from the date of approval. In instances where valid reasons are presented, the Tax Administration may permit taxpayers to settle the disclosed tax amount in installments over a six-month period post-approval.
Waiver of Penalties and Interests for Late Payment
Taxpayers are expected to fully disclose all relevant information regarding unpaid taxes and will be granted relief in the form of automatic waiver of penalties and interests for late payment of such taxes.
Next Steps
The Tax Administration will furnish additional details concerning the voluntary disclosure application process and payment guidelines in due course.