The report for internship carried out in rwanda revenue authority, customs services department:

NATIONAL UNIVERSITY OF RWANDA

FACULTY OF ECONOMICS AND MANAGEMENT
DEPARTMENT OF ECONOMICS
OPTION: MONEY AND BANKING

THE REPORT FOR INTERNSHIP CARRIED OUT IN
RWANDA REVENUE AUTHORITY, CUSTOMS
SERVICES DEPARTMENT
PERIOD: 8^th JUNE - 8^th JULY 2009.

PRESENTED BY: NSENGIYUMVA Samson

SUPERVISOR: GAHUTU Emmanuel

Done at KIGALI, 21^st July 2009

FOREWORD

The National University of Rwanda and the Faculty of Economic and Management in particular envisaged the program of a training course for finalist students in order to familiarize the students with the professional environment and to supplement the acquired theory by practices. It is within this framework that we carried out our one month training course in Rwanda Revenue Authority (RRA), customs services department.

ACKNOWLEDGEMENT

This report is the fruit of combined efforts of several people who have manifested their will for the realization of it.

Firstly, we thank the Almighty God for his love manifested in our life,

We make acknowledgement to the administration of Rwanda Revenue Authority (RRA), the customs services department which has made the agreement by welcoming us during this training course and its personnel for the collaboration and assistance expressed to us.

We thank the academic authorities of the NUR whose concern is to help us to become able to contribute to the sustainable development by giving us a qualified education.

Finally, we express our gratitude for all those people who have contributed morally or materially to the success of this training course.

LIST OF ABBREVIATIONS

ASYCUDA: Advanced/Automatized System for Customs Data

BCR: Banque Commerciale du Rwanda

CET: Common external tariff

CIF: Cost Insurance and Fret

COMESA: Common Market for Eastern and Southern Africa

D/R: Déchargement/Rechargement

DAD: Déchargement A Domicile

DDCOM: Déclaration Douanière COMESA

DSC: Déchargement Sur Camion

DTD: Domestic Tax Department

DTI: Département de Technologie et Information

EA: Entrepôt agricole

EAC: East African Community

EARA: East African Revenue Authorities

EDA: Entrepôt Douanier A

EDB: Entrepôt Douanier B

EDC: Entrepôt Douanier C

FOB: Free On Board

GATT: General Agreement on Tariff and Trade

I.D: Importation Duties

ICHA: Impôt sur le Chiffre d'Affaires

IT: Information Technology

MAGERWA: Magasins Généraux du Rwanda

MINECOFIN: Ministère des Finances et de la planification Economique

MINADEF: Ministère de la Défense

NUR : National University of Rwanda

RBS: Rwanda Bureau of Standard

RPD: Revenue Protection Department

RRA: Rwanda Revenue Authority

SDV: SCAC, DELMAS and VIELJEUX

T.C: Tax on Consumption

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T1: Transit document VAT: Value Added Tax WHT: Withholding tax

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TABLE OF CONTENT

FOREWORD i

ACKNOWLEDGEMENT ii

LIST OF ABBREVIATIONS iii

TABLE OF CONTENT v

CHAPITRE I. THE GENERAL HISTORICAL VIEW ON TAXES IN RWANDA 1

I.2. Introduction 1

I.2. Presentation of «Rwanda Revenue Authority» 2

I.2.1. The Objectives of Rwanda Revenue Authority 2

I.2.2. The Missions of Rwanda Revenue Authority 3

I.2.3. The Vision of Rwanda Revenue Authority 3

I.2.4. Rwanda Revenue Authority core strategic values 3

I.2.5. The Organizational Structure of Rwanda Revenue Authority 4

I.2.6. The Partners of Rwanda Revenue Authority 4

I.3. The Departents of Rwanda Revenue Authority 5

I.3.1. Operational Departments 5

I.3.1.1. Customs and Excise Department 5

I.3.1.2. Domestic Taxes Department 5

I.3.2. Support Departments 6

I.3.2.1. Revenue Protection Department 6

I.3.2.2. Quality Assurance 6

I.3.2.2.a. Mission 6

I.3.2.2.b. Strategic objectives 6

I.3.2.3. Taxpayer Services 7

I.3.2.3.a. Mission Statement 7

I.3.2.3.b. Strategic objectives 7

I.3.2.3.c. Specific Objectives 8

I.3.2.4. Planning and Research 8

I.3.2.4.a. Mission Statement 8

I.3.2.4.b. The Department Strategic Objectives 9

I.3.2.5. Legal and Board Secretariat 9

I.3.2.5.a. Mission Statement 10

I.3.2.5.b. Strategic Objectives 10

I.3.2.6. Human Resources & Administration 10

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I.3.2.7. Information Technology 10

I.3.2.7.a. Mission 10

I.3.2.7.b. Strategic Objectives 11

I.3.2.8. Finance Department 11

I.3.2.8.a. Departmental Mission 11

I.3.2.8.b. Objectives 11

I.3.2.8.c. Responsibilities 12

CHAPTER II. RWANDA REVENUE AUTHORITY, CUSTOMS SERVICES DEPARTMENT 13

II.2. Customs Offices 13

II.2.1. Attributions 15

II.2.2. Objectives of the customs services department 15

II.3. Organizational Structure of customs services department 16

CHAP III: PERSONAL EXPERIENCE DURING THE INTERNSHIP IN 17

CUSTOMS SERVICES DEPARTMENT

III.1. Gikondo service unit (long room) and cargo management unit 17

III.2. Archive Unit 17

III.3. Formality of Clearing 18

III.3.1 Orientation of the goods 18

III.3.2. The Manifest 21

III.3.3. The arrival note 22

III.3.4. Declaration of the goods 22

III.3.5. Preparation and deposit of the declaration in customs offices 22

III.3.6. The control of the declaration 23

III.3.7 validation of the declaration 23

III.3.8 The verification of the declaration 24

III.3.9. The documentary verification 25

III.3.12 The physical verification 26

III.3.13. Counter-verification 27

III.4. Duties and taxes in Customs services 27

III.5. Encountered constraints and difficulties . 29

IV. CONCLUSION AND RECOMMANDATIONS 30

REFERENCES 32

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CHAPITRE I. THE GENERAL HISTORICAL VIEW ON TAXES IN

RWANDA

I.2. Introduction

The history of taxes in Rwanda indicates that the first tax legislation was inherited from colonial regimes. This tax legislation included the Ordinance of August 1912, which established graduated tax and tax on real property. There was another Ordinance on 15th November 1925 adopting and putting into application the Order issued in Belgian Congo on 1st June 1925, establishing a profits tax.

This law was amended from time to time in order to comply with the changing economic environment. Such other legislative instruments include the 1973 law governing property tax, the tax on license to carry out trade and professional activities, the law N°. 29/91 of 28th June 1991 on sales tax /turnover tax (now repealed and replaced by the law N°. 06//2001 of 20/01/2001 on the Code of Value Added Tax (VAT).

A substantive Law governing Customs was enacted on 17th July 1968 accompanying the Ministerial Order of 27th July 1968, putting into application the Customs Law.

The administration and accountability of taxes and duties in Rwanda was initially under the Ministry of Finance and Economic Planning. This was later vested into an independent body - the Rwanda Revenue Authority - that was established by law no 15/97 of 8th November 1997.

The Rwanda Government announced the idea of setting up the Rwanda Revenue Authority in February 1997 as a major tax modernization initiative to try and redress the detrimental impact on the revenue collecting capacity of the Departments of Tax and Customs shattered by the events of the 1994 war. Rehabilitation of these, therefore, is the background to the formation of the RRA in the quest to restore procedures and controls by the Government of Rwanda. Parliament, having reviewed changes to fiscal policy in 1997, made

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preparations, and on 1st January 1998, the autonomous Rwanda Revenue Authority was launched. The RRA is a central body for the assessment and collection of specified tax revenue, for administration and enforcement of the laws relating to such revenue, as well as accounting for all the revenue to which those laws apply. The RRA is also required to advise the Government on policy matters relating to revenue whether specified or not.

I.2. Presentation of «Rwanda Revenue Authority»

The Rwanda Revenue Authority was established under law N° 15/97 of 8 November 1997 as a quasi-autonomous body charged with the task of assessing, collecting, and accounting for tax, customs and other specified revenues. This is achieved through effective administration and enforcement of the laws relating to those revenues. In addition, it is mandated to collect non-tax revenues.

The Authority is also responsible for providing advice to the Government on tax policy matters relating to revenue collections. It performs other duties in relation to tax administration, as may be directed from time to time by the Cabinet.

The Authority was established as part of the reform program by the Government of Rwanda designed to restore and strengthen the main economic institutions of the country. Additionally, the Government wanted to improve its resource mobilization capacity while providing the public with better quality and courteous services. In a bid to mobilize more resources the Authority is therefore required to assist taxpayers in understanding and meeting their tax obligations thus raising their compliance.

I.2.1. The Objectives of Rwanda Revenue Authority

The RRA has the task of financing the national budget through revenue mobilization so as to:

1. Finance development activities and alleviate poverty in the Rwandan society;

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2. Aim at empowering the Government of Rwanda to fund its own essential expenditure.

I.2.2. The Missions of Rwanda Revenue Authority

«Mobilize revenue for economic development through efficient and equitable services that promote business growth.»

It contributes to the National Development by maximizing revenue collection at minimum cost, while providing a high quality, courteous and equitable service to taxpayers.

I.2.3. The Vision of Rwanda Revenue Authority

Its vision is «to become a world-class efficient and modern revenue agency, fully financing national needs».

I.2.4. Rwanda Revenue Authority core strategic values

· Integrity;

· Customer focus;

· Transparency;

· Professional Service delivery;

· Teamwork.

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I.2.5. The Organizational Structure of Rwanda Revenue Authority

MINECOFIN

BOARD OF DIRECTORS

COMMISIONER GENERAL

DEPUTY C.GENERAL AND COMMISSIONER FOR COSTOMS SERVICES

QUALITY INSURANCE DEPARTMENT

REGIONAL CO-ORDINATIONAL UNIT

LEGAL AND BOARD SECRETARIAT

HR&ADMINISTRATION

FINANCE DEPARTMENT

DOMESTIC TAX
DEPARTMENT

CUSTOMS SERVICES
DEPARTMENT

REVENUE PROTECTION
DEPARTMENT

LARGE
TAXPAYERS

SMALL AND MEDIUM TAXPAYERS

PLANING&RESEARCH
DEPART

TAXPAYERS SERVICES
DEPART

IT DEPARTMENT

I.2.6. The Partners of Rwanda Revenue Authority

Rwanda Revenue Authority is keen on working collaboratively with like-minded institutions. The list of partners varies from sister organizations to international organizations and Governments.

Here are some of the partner organizations:

Department for International Development International Monetary Fund

World Bank

Revenue Commissioners, Ireland

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East African Sister Revenue Authorities

Uganda Revenue Authority Kenya Revenue Authority Tanzania Revenue Authority Burundian Directorate of Customs

Other African Partner Revenue Authorities

National Revenue Authority of Sierra Leone South African Revenue Services

I.3. The Departments of Rwanda Revenue Authority I.3.1. Operational Departments

I.3.1.1. Customs and Excise Department

It aims at contributing to the achievement of Rwanda Revenue Authority's objectives by maximizing the collection of all revenues due on imports, at minimum cost; and to facilitate trade through providing a responsive and efficient service to stakeholders.

The primary function of Customs Services Department is to assess, collect and account for import duties and taxes due on imports.

I.3.1.2. Domestic Taxes Department

The Domestic Tax Department (DTD) was formed in April 2006 in order to create a one-stop, efficient and customer-oriented tax office. The basic objective was to increase and coordinate control.

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I.3.2. Support Departments

I.3.2.1. Revenue Protection Department I.3.2.1.a. Mission

The RPD Mission is to minimize revenue losses by deterring, detecting and preventing smuggling, tax evasion and avoidance as well as other breaches of revenue laws.

I.3.2.1.b. Strategic Objectives

? Combat tax evasion and smuggling

? Collection and dissemination of intelligence pertaining to evasion of

taxes and duties

? Provision of credible and effective deterrent measures in the tax law

? Investigation of cases of tax evasion, tax fraud and smuggling

? Compilation of case reports and recommendations for the prosecution of

financial crimes.

I.3.2.2. Quality Assurance I.3.2.2.a. Mission

To provide assurance on the effectiveness and efficiency of the operating of internal control systems as well as promoting staff integrity. The department also monitors and ensures that quality service is delivered at the least cost with the maximum satisfaction to stakeholders.

I.3.2.2.b. Strategic objectives

To achieve the departmental overall objective. The Quality Assurance Department has set strategic objectives:

To ensure that the internal control systems in the RRA are working economically, efficiently and effectively by conducting regular internal audit and quality audit assignments;

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To fight against corruption by investigating cases of actual or suspected corruption, theft and other serious staff malpractices as well as promoting staff integrity;

To ensure the quality of service delivery to customers, across all departments of RRA, at the least cost;

To continue the implementation of RRA's quality policies as a way to be the best revenue authority in the region covered by the east African Revenue Authorities (EARA) and aim ultimately to become a world-class organization, with the quality of the work demonstrated by certification to a world-class standard.

I.3.2.3. Taxpayer Services

The main responsibility of the Taxpayer Services Department is to foster mutually beneficial relationships with external stakeholders through a variety of taxpayer services including customer education and Public Relations. The Department disseminates legal and technical tax information in a simplified way for everyone to understand, so as to promote voluntary compliance. Some of the methods used to deliver these services include tax clinics tailored to meet the specific needs of customers, participation in public events such as shows and exhibitions, and the annual Taxpayers' Day.

I.3.2.3.a. Mission Statement

Foster voluntary compliance through the delivery of enhanced programs of taxpayer's education and high quality customer services. Optimizes service delivery through cross-departmental team-based working processes.

I.3.2.3.b. Strategic objectives

To sensitize and educate taxpayers on the incentives and follow up of implementation of the general standards of customer services by developing strategic public relations activities and a culture of customer care

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I.3.2.3.c. Specific Objectives

· To design and conduct comprehensive taxpayer education programs on importance of taxes in a country and the role of taxpayers to be compliant, tax incentives and taxpayer registration

· To improve the corporate image of RRA by improving our Corporate Social responsibility.

· To follow up the activities and to finalize the process of their establishment at Districts level.

· To generate simplified written information and guidelines including tax reforms for taxpayers and the general public.

· To produce special radio and Television programs and using drama as a tool for sensitizing the general public.

· To reduce the complaints of taxpayers and partners through good management of suggestion boxes.

· To follow up the activities of Tax Friend Clubs in secondary schools and to create other new ones in higher educational institutions.

· Improve the skills of staff for Taxpayer Services Department.

· To speed up the management of feed back of complaints and information through hotline and website.

· To set up an operational Call Center

· To monitor customer handling within the RRA operational departments essentially and other departments.

I.3.2.4. Planning and Research

I.3.2.4.a. Mission Statement

To coordinate the preparation of the RRA corporate plan, conduct research studies and provide reliable tax information to management, the Board and other Stakeholders.

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I.3.2.4.b. The Department Strategic Objectives

· Coordination of Corporate Plan preparation and its ultimate monitoring for its effective implementation within the Authority;

· Compiling and analyzing information relating to revenue data and reporting on it to management and other stakeholders;

· Coordinating RRA's input into tax revenue forecasts made by MINECOFIN;

· Conduct research studies on all issues that have an impact on the tax base;

· Coordinating regional and international issues as well as donor-funded projects in which the RRA is involved;

· Coordinating RRA modernization programs;

· Coordinating RRA's advice to the Ministry of finance on macro-economic and tax policy issues;

· Developing Tax Administration Operational Policy.

I.3.2.5. Legal and Board Secretariat

The Legal and Board Secretariat Department provides legal services in support of RRA's mandate in line with the Corporate Plan.

The Department supports enhanced revenue collection through:

Making proposals for more relevant and effective legislation;

Continuous follow-up of tax cases pending in the courts and the evaluation of potential and pending cases with a view to their early conclusion;

Representing RRA in court; and

Cooperation with other government departments to ensure issues affecting revenue leakage addressed.

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I.3.2.5.a. Mission Statement

To provide legal advice and guidance in order to maximize revenue collection at minimum cost. To manage and coordinate appeal cases and to serve the Board effectively.

I.3.2.5.b. Strategic Objectives

To ensure that effective legislation is in place to enable revenue collections. To handle appeal cases professionally and expeditiously

To represent the Authority in all litigation cases

Drafting new or amended legislation

I.3.2.6. Human Resources & Administration

Contribute to maximum revenue collection and quality service to customers and stakeholders by recruiting, retaining and developing competent human capital, through providing the necessary personnel and logistic support systems to other departments.

? Recruiting

? Training

? Retaining

? Compensating highly qualified staff in the Authority

? Performance management

I.3.2.7. Information Technology

I.3.2.7.a. Mission

In line with RRA's mission, the mission of the IT Department is to make a positive impact on the RRA's revenue performance and administrative efficiency, through the provision of cost-effective, reliable and secure IT services and systems.

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I.3.2.7.b. Strategic Objectives

· To manage and coordinate RRA's on-going computerization program, always ensuring it is aligned with RRA's mission, objectives and priorities.

· To assist departments with the definition, introduction and support of cost-effective computer systems.

· Update the standard of IT systems and equipment to be used in RRA;

· To procure necessary IT equipments, software and services through the normal tendering procedures.

· Supporting other departments in their daily activities requiring the use of IT systems

· To ensure RRA's IT assets are safeguarded and properly maintained in good working order.

· Facilitating the taxpayers service delivery by providing reliable and secure systems and up-to-date equipment;

· Managing the fiscal data by assuring the data entry and databases security;

· Using the technology to increase Rwanda fiscal and non-fiscal revenue

I.3.2.8. Finance Department

I.3.2.8.a. Departmental Mission

Consistent with the RRA's mission, the Department of Finance has the overall mission of establishing and maintaining efficient financial management and accounting systems and processes.

I.3.2.8.b. Objectives

The departmental strategic objectives are developed to support the organizational strategic objectives. Specifically, for the Department of Finance, these include:

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1. To contribute to the processes of maximizing the flow of revenues to the government by ensuring the existence of efficient and effective procedures for collecting, safeguarding, accounting and reporting of government revenues and Social Security Fund contributions.

2. To establish and maintain systems of managing and controlling organizational costs with the objective of minimizing the overall costs of collection.

3. To develop and maintain the means of providing accurate and reliable financial management information to the stakeholders of the RRA across the government of Rwanda as a means of contributing to national planning and development.

4. To advise senior management on the treasury and financial management aspects of RRA so as to ensure that public funds are well utilized and RRA maintains a good liquidity position.

I.3.2.8.c. Responsibilities

The responsibilities of the Department of Finance are set out in its medium term departmental plan.

They consist of:

The preparation and presentation of the RRA's budget;

The preparation of consolidated management reports and statutory financial accounts (including information about revenue collected and expenditure incurred);

The operation of advances for payroll purposes and other financial transaction processing; and

The operation of the RRA's internal financial procedures and controls.

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CHAPTER II. RWANDA REVENUE AUTHORITY CUSTOMS
SERVICES DEPARTMENT

II.1. Customs Operations

Customs examine the documentation to establish the correct bond amount to be debited and generate a Transit document (T1) from the declaration lodged by the Clearing Agent if it meets all the requirements during entry examination.

The transit document (T1) contains summarized information from the declaration and constitutes the actual transit transaction generated.

At its generation, all appropriate blank fields are filled in and the T1 is then registered and a T1 registration number is generated with serial D.

At this stage, Customs automatically debit the Transit bond account of the clearing agency at registration of the Transit document (T1).

II.2. Customs Offices

Here are different RRA customs offices countrywide:

11AB Akanyaru-Bas 11AH Akanyaru-Haut 11BU Butare 11BZ Buziba 11GA Gatuna 11GI Gikondo 11GT Gatsata oil Depots 11KA Kagitumba

11KB Kabuye oil Depots 11NS Nshili

11RE Rutete 11RU Rusumo 12BA Buhita 12KN Kaniga 12KP Kigali-Poste 12RW Rwempasha 13MU Murago 13RO Rwabusoro 21KA Kigali-Aeroport 22AE Aerogare-Kgl

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31CY Cyanika

31GC Gisenyi-Corniche

32PL Gisenyi Poids-Lourds

33KA Kabuhanga

41BU Bugarama

41BW Bweyeye

41CY Cyangugu

41KI Kibuye

41MT Mutara

41MU Mururu

41RU Ruhwa

HQ01 Customs Headquarters.

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II.2.1. Attributions

The Customs Department aims at contributing to the achievement of Rwanda Revenue Authority's objectives by maximizing the collection of all revenues due on imports, at minimum cost; and to facilitate trade through providing a responsive and efficient service to stakeholders.

The primary function of Customs Services Department is to assess, collect and account for import duties and taxes due on imports.

Apart from its fiscal responsibilities, Customs Services department is responsible for the following:

Enforcement of Customs legislation and other relevant laws;

Facilitation of legitimate trade;

Protection of society from illegal entry and exit of prohibited goods;

Compilation of trade statistics for economic planning;

Take all actions necessary to identify and combat evasion of duties and to combat fraud in it's many forms;

Ensure efficiency and effectiveness of the Customs Services department through enhanced management controls, training, increased accountability and the expansion of computerization.

II.2.2. Objectives of the customs services department

The Department works to ensure that all legally chargeable revenues are paid through effective administration of the relevant laws in order to facilitate both international and national trade such that local and foreign investment is facilitated while ensuring that local society is protected from importation of hazardous material/goods.

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Trade Statistics &
Documentation Unit

International Affairs Unit

Gikondo operations
Unit

Airport operations unit

Petroleum Unit

Bonded Warehouse Unit

II.3. Organizational Structure OF customs services department

Commissioner ofCustoms Services department

Executive support unit

IT Support unit

Objections & Appeals

Operations Policy & Business Development Division

Field Operations Division

Compliance &

Enforcement Division

Trade Management Division

Business Development Unit

Database applications Unit

Cargo management Unit

Transit, Export & Outstation Unit

Revenue Accounting
Unit

Risk Management Unit

Post Clearance Audit Unit

Enforcement Unit

Tariff, Valuation & Rules of Origin Unit

Legal & Taxpayers services unit

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CHAP III: PERSONAL EXPERIENCE DURING THE INTERNSHIP IN
CUSTOMS SERVICES DEPARTMENT

This Training course was carried out in Rwanda Revenue Authority, Customs Services department from June 8^th to July 8^th, 2008. There, we have made rotation in various units in order to have a general idea about the principal activities of the department. My internship was carried out in the following units:

? GIKONDO SERVICE unit (long room)

? Archive unit and,

? Cargo management unit.

The following paragraphs present the activities of each unit.

III.1. Gikondo service unit (long room) and cargo management unit

In the two units, the activities are related to the imports and they have a relationship with the activities of the exports, transit and out station and this resemblance corresponds to clearing. Here, one explained me the process of clearing of the imports (or exports) as of their entry in customs to their exit from the warehouses. The difference between the imports and exports in this process is that exports are exonerated from the rights and taxes. After the explanations, I accompanied the inspectors in physical control/verification (I have seen the process of vehicles verification, plastic materials, etc), I was shown how the documentary verification is made, the delivery of a release which allows the importer to carry his goods from the warehouse once the verification agrees with what was declared or quarry if it does not agree.

III.2. Archive Unit

The archive being a space of classification of the files; in the file of Customs services department the files of the tradesmen are classified after the latter finished the clearing of their goods. These files are classified by chronological and numerical order.

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The files classified in the file are of great importance because they are used as reference in the event of litigation either for Customs services departments (in the case of audit for example), for the clearing agents, the exporter/importer, the verificator, etc.

During one week that in this service, I have participated in the classification of the files, and I classified more than 300 files.

III.3. Formality of Clearing

III.3.1 Orientation of the goods

On arrival of the imports at the border, the agent of RRA draws up a document of T1 and the clearing agent establish and sign the DDCOM that they transmit to the agent of customs, which by after, pack the goods by a seal and record the operation.

When the transporter vehicle (of imports, exports or transit) arrive at the parking of Gikondo, the owner presents the truck accompanied by a customs declaration COMESA to the agent of MAGERWA or SDV (SCAC, DELMAS and VIELJEUX) and at the principal verification agent on the parking. At the reception of the DDCOM, the principal agent of verification specifies the orientation of the goods waiting for clearing.

There are four orientations according to modes' of unloading:

Unloading out of warehouse;

Unloading and Recharging (D/R);

Unloading in Residence (DAD);

Unloading On Truck (DSC).

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Unloading in warehouse

It relates to the goods which must pass in warehouses before they are cleared. During unloading, the goods are pointed, i.e. counted and placed well in the warehouses in front of the agents of the customs jointly with those of MAGERWA or SDV, in front of the clearing agent or the owner of the goods. Here, the MAGERWA or SDV is responsible for the good conservation of these goods until their removal.

After, an arrival note is made and delivered to the clearing agent or to importer to confirm the arrival of the goods to him.

Thus, the clearing agent will draw up a declaration starting from the data being on the arrival note.

Unloading on truck

This mode of unloading is granted for the goods homogeneous and easy to count and for the honest importers.

The goods are cleared directly on truck without waiting the pointing and unloading process with the warehouse. It is a facility granted to the goods whose destination is urgent. In this case, the goods remain in the truck while waiting for the physical checking/verification and clearing, the truck remaining at the parking.

Unloading in residence

This unloading is granted for emergency circumstances, goods whose constitution can harm the warehouses (for example chemicals), or these which can be damaged during recharging.

The authorization of DAD is granted by the commissar of the Customs. The operations of DAD are supervised by a verification agent of Customs who draws up an ad hoc report/ratio.

A provisional declaration is done and a guarantee equivalent to the rights and taxes is deposited at the bank.

The regularization of the situation must be done in fifteen days starting from the date of DAD.

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Unloading and Recharging (D/R)

This unloading relates to the goods whose enumeration and checking are easy to be made before being reloaded in the truck.

In all the cases, the agent of RRA authorizes the entry of the goods (if it is the case) and records this operation, after the agent of MAGERWA records the declaration and weighs the truck to see the gross weight in order to determine the net weight. The documents accompanying the goods are lodged with the principal verificator (cargo controller) who records them after having verified if the truck is sealed and if the number of the seal corresponds to that which is registered on the DDCOM and finally he/she determines the mode of the goods according to their nature. The goods are directed according to their nature, and must be verified according to the channel in which they belong.

These channels are:

? Red Channel: the regime under which the verification must be 100% (physical and documentary);

? Yellow Channel: the regime under which verification is only documentary for the honest tradesmen having the TAX CLEARANCE CERTIFICATE according to which the customs officer relies on him and must release the goods in order to do the post-audit to that after unloading at residence.

? Blue Channel: channel under which the customs officer accepts all what was declared.

? Green Channel: This channel is reserved for embassies and consulates, theirs imports are exonerated.

The goods must be directed in the warehouses of MAGERWA or SDV for the verification (physical and/documentary) which is done by the customs officer for taxation and for the Rwanda bureau of Standard charged in charge with the checking of the quality and the state of the goods. Each unit works independently from the other.

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The warehousing is done according to the regime of the goods. This is why a part from the private warehouses the MAGERWA (Gikondo) has various deposits which are:

· the agricultural warehouse (EA); Customs warehouse A (EDA);

· the Customs warehouse B (EDB);

· the Customs warehouse C (EDC);

· parking I, II and III

As it has been explained before, unloading is done in the presence of the pointer, agent of the MAGERWA, who checks that the transported quantity corresponds to that which is registered on the DDCOM, if it is not thus the pointer notes what it saw, sign and the owner of goods signs too. It is this document (arrival note) which is the reference on amount of the rights and taxes.

For the fictitious warehouses which are the stores, warehouses, or deposits of the private companies approved by the customs to facilitate their trade, before discharging the goods, the holder of the warehouse must inform an agent of customs who has the authority to loosen the locks and seals of the conveying truck and to sign on the declaration if it is in conformity with reality.

After the physical verification is made by the pointer assisted by the tradesman or a verification agent who represents it and with the driver, the pointer draws up a document called the manifest.

III.3.2. The Manifest

At the end of unloading, the pointer of MAGERWA establishes a writen note. This certificate has the following mentions:

· The state goods;

· The nature of the goods;

· The weight;

· The quantity;

· The date of unloading and;

· The location of these goods in the warehouse.

Since the introduction of the system harmonized «ASYCUDA++» (Automatized System for Customs Data) which is an automatic system of customs data

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The manifest is signed jointly by the pointer of MAGERWA or SDV and the conveyor. It is at this time that there is a transfer of responsibility on the goods between the conveyor and MAGERWA or SDV. Before the establishment of the arrival note, a written note is transferred to the pointer of Customs being in the warehouse for the recording and signature.

III.3.3. The arrival note

It is the document which indicates that the goods arrived in a warehouse. The owner has a period of 15days to pay the invoices and remove the goods from the warehouses, beyond the deadline, the goods will be charged and after three months, they will be sold. The clearance agent must follow all the process because it is the only one who is recognized officially by the tax authorities.

III.3.4. Declaration of the goods

Only the clearing agencies approved are entitled to make statements of the

imported or exported goods.

The owners of goods must give to the clearing agents all the documents relating

to the clearing as well as other information concerning the goods.

The various kinds of declarations are:

? The declaration for consumption;

? The declaration for final export;

? The declaration for temporary importation;

? The declaration for temporary export.

All these statements are made on a single model of declaration. The only characteristic which differentiates them it is the destination which is allotted to them in the form of code called technically, «customs regime».

III.3.5. Preparation and deposit of the declaration in customs offices

It consists in giving to a declaration a legal existence in order to make this statement notarial and irrevocable.

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acquisition. The declarations of the goods stored at GIKONDO- MAGERWA customs office, SDV and Airport of KANOMBE are made electronically. Other customs offices have almost received all the ASYCUDA++ and its use is in process.

The declarations are made in the rooms called «DTI Bureau», in the customs enclosures and the data are recorded automatically with the central server of «the ASYCUDA++».

Once the acquisition is finished, a copy of the declaration accompanied by the joined documents is deposited to the reception of the customs and the other to the clearing agent.

During two weeks (from 15^th to 19^th: in Gikondo Service unit (long room) and from 29^th to the 08^th: in cargo liner management unit), we observed the routing of the declaration from the beginning to the end, i.e., from the declaration to the

removal of the goods.

III.3.6. The control of the declaration

The control of the declaration of the goods is a set of the measures taken by the customs to control exactitude and the authenticity of the statings of the declarations which are accepted and which can consist of:

1° the examination of the documents being used for the declaration

2° the examination of the goods and the sampling for analysis or deep examination.

The control of the declaration includes

- Validation of declaration

- Verification and declaration - Counter-verification

III.3.7 validation of the declaration

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In the validation, the customs agent entitled must verify if the declaration comprises:

A record number taken during the data-processing of the ASYCUDA ++ in an uninterrupted series of number to each mode (consumption, export, transit, etc); The date of registration, that of the day of the deposit of the declaration and bases calculation of charges for the goods exceeding 15 days in the public warehouses;

The declaration must have a stamp of the clearing agent and the visa of the customs agent which validates the declaration.

III.3.8 The verification of the declaration

The verification is a very important operation in clearing issues. It helps to

highlight the infringements which can harm the collection of the taxes.

These infringements are:

The undervaluation of the goods;

False denomination of the goods;

The false origin;

The excess of quantity of the goods

The verification is of two kinds:

The documentary verification and/or; The physical verification.

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III.3.9. The documentary verification

Documents required

The different documents according to such or such importer which is in such or such mode or special mode, are deferred in the list of some documents required following:

· Commercial invoice,
· Authorization of the

· packaging list, importation of the drugs,

· letter of loading,
· Certificate of quality

· Insurance invoice,
· Veterinary certificate,

· Transport invoice,
· Licence of importation,

· Certificate of exemption,
· Letter of investigation,

· letter of guarantee,
· Contracts,

· certificate of origin,
· Pro forma invoice,

· certificate of gift,
· Certificate of insurance,

· Air waybill
· Insurance Policy,

· Permission of the industrial
· Arrival note,

exploitation,
· GATT Form,

· Authorization of MINADEF,
· Seal of Rwanda Bureau of

· Health agriculture certificate, Standard (RBS),

· Certificate of fumigation,
· Etc.

The documentary verification consists of the very deep verification of the documents accompanying the declaration like as well as all the mentions being on the declaration.

The verificator must verify the values, i.e., if value CIF is well calculated as well as the import duties and other taxes.

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III.3.12. The physical verification

The physical verification is made within the framework of making sure that the goods being the subject of the clearing are those which are stipulated on the joined documents.

In this verification, the physical verificator must look at the quantities, the quality of the goods and their origin. He/she must check the labels being on the packing of the goods because it is those labels which contain much information on the goods.

The physical verification is made in the presence of the clearing agent and/or of the importer so that they can note together the state of the goods to be verified.

Once the verification is finished, the verificator establishes a certificate of verification and liquid the declaration. When there are discordances between physical and documentary verification, a report (statement) is drawn up, the duties and taxes are recovered. A fine is taxed according to the importer or clearing agent. After the physical and documentary verification, the file is sent to the liquidator to check if it can liquidate it or not. If it notes that this file has a problem, it will be transferred to the QUERRY for its modification.

The clearing agent can make the QUERRY himself when he/she notes that he/she has mentioned wrong notes on the declaration. In this case, he/she asks for the modification of this declaration and there is no fine.

After the final verification, the duties and taxes will be paid at the Collector of customs at GIKONDO and at Airport of KANOMBE. The BCR intervenes as Cashier.

After the payment, the clearing agent or the importer will take the goods in the warehouses where they were preserved waiting for clearing.

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III.3.13. Counter-verification

The counter-verification is the checking made after the removal of the goods from the warehouses. It consists in checking if there are no errors during the verification, and if the duties and taxes not declared before are recovered.

III.4. Duties and taxes in Customs services

As any organization which sells the services, Customs services departments, which is an administration with public vocation, aims to provide to its «customers» a service of quality, effective and efficient. To reach its goal, a good structure is established as indicated in its organization chart and especially a continuous training of its agents is done.

It is within this framework that it is convenient to speak about the formulas of computation of the duties and taxes with the objective of giving the reader of this report the tools for the declaration of the imported goods.

The Formula for calculating the import duties:

CIF value: FOB +fret+ insurance fees +others fees

Import Duties = customs value (CIF) * rate relating to the fiscal base

of the goods

The FOB value is the value registered on the invoice before the loading.

The Freight is the value of the transport used from the factory to the destination of the goods.

Insurance: calculated according to the nature of the goods.

The rates of the import duties on the products are registered in the customs tariff and are classified according to whether it is a finished products, semi-finished product, raw materials and goods of equipment.

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From the 1^st July 2009, the Customs union of the East African Community (EAC) is operational. Table 1, shows the various rates applied according to the Common external tariff (CET) of the EAC.

Table 1: Tax rate according to products'

PRODUCT	RATE
Finished products	25%
Semi-finished products	10 %
Raw materials	0%
Goods of equipment	0 %

Source: RRA, Department of the Customs, Tariffs Section.

The value-added tax (VAT)

The VAT was founded by the law n? 06/2001 of January 20, 2001, law which repeals the law n? 29/91 of June 28, 1991 relating to tax on business (ICHA). This tax is levied on the supply of the goods and services including the imports on the rate currently fixed at 18%.

For the imported products, the VAT is received by the collector of customs on behalf of the receiver of the VAT.

VAT =CIF+ Fees MAGERWA +I.D+T.C (if necessary) x18%

Tax on Consumption (TC).

T.C = (CIF+ Fees MAGERWA+I.D) * rate of T.C

The tax on consumption in new Common External Tariff (CET) of the EAC becomes much higher for the products imported when they are produced in the Member States of the EAC (rice, sugar,....) and for dangerous goods in order to discourage their consumption (tobacco,...).

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NB: The tax on consumption for the vehicles does not relate to the minibuses of 14 places and more, the trucks of any kind, the vans of simple cabin and the vehicles diesel.

Installment on income tax of companies (WHT).

This installment was founded by the law n?26/1 of the 18/4/2001 and is fixed at the rate of 5% of CIF value. It is paid at the time of the importation.

However, the importers with fiscal integrity receive the tax clearance certificate delivered by the commissar general RRA in order to exempt this installment to them.

WHT= CIF X 5%

III.5. Encountered constraints and difficulties

Given the envisaged training expenses for surviving during this month of training course, these expenses were granted to us very late. Another issue is that these fees are not sufficient for the whole process of the training because the living conditions are nor easy in Kigali.

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IV. CONCLUSION AND RECOMMENDATIONS

In this report it can be specified that the training course of one month carried out within RRA, Department of the Customs services , was for us an occasion to enrich our knowledge as regards to clearing process.

This training course enabled us to know the operation of the RRA especially that of Customs services departments. We have rotated in the Customs units and seen the routing of the declaration from the beginning to the end, i.e., from the declaration to the removal of the goods.

We saw how the operations of clearing are made since the entry of the goods to their exit from the customs.

We consulted the documents of customs such as the DDCOM, the declaration, the certificate of origin, the invoices, the banking declarations of import and export....

During the period of our training course, we noted certain gaps for which suggestions and recommendations are necessary:

- The concentration of the customs services in one building is necessary to avoid the movement of the clearing agents during the clearing process of the goods.

- Vigorous training of the clearing agents in customs and the taxpayers to avoid errors in the calculation of the import duties and other taxes.

- To increase the personnel of the customs in order to better facilitate the customs procedures.

- To reduce the customs procedures so that the goods do not delay in the customs warehouses.

- To recruit the agents trained in customs issues and data-processing.

- The care on behalf of the leaders of the customs to detect any kind of customs fraud but also to make a deeper investigation in the event of suspicion of corruption for not punishing the innocent people.

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- Because of the role of the customs services department in Rwandan economic development, time keeping is very crucial. On this issue, I suggest that RRA should build the lodges near the offices for the customs officers.

- I suggest that RRA should create a new department charged with Informal Sector activities because in rural areas there are some activities which are not recognized by RRA.

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REFERENCES

1) Common External Tariff of EAC in force since 01st July 2009

2) Manuel d'évaluation du GATT première édition 2004

3) Manuel de vérification physique en douane

4) Rapport de stage effectué dans l'Office Rwandais des recettes, département des douanes, en Novembre 2007 par UMUKURIKIRA Germaine

5) Rwanda Revenue Authority Annual report 2007

6) Rwanda Revenue Authority Annual report 2008

7) République Rwandaise, législation douanière du Rwanda, loi n^° 21/2006 du 28/04/2006 portant Régime douanier

8) République Rwandaise, art. 1 de la loi n^°15/1997 du 08/11/1997, Journal Officiel n^°22 du 15/11/1997

9) Http:// www.rra.gov.rw/generalinfo.htlm