A Critical Analysis of Effectiveness of Tax Offences Control Mechanisms Under Rwandan Law
par Charles KABERA
Kigali Independent University - LLB 2008
In Rwanda, the rate of literacy is rather low and there is limited tax education. For an uneducated person, it is difficult to understand the need for payment of taxes. Taxes are treated as punishment.
Low literacy level makes it even more difficult for tax administration to educate taxpayers about their obligations and for taxpayers to complete the necessary forms.
Many of the options available to the tax administration to educate taxpayers, such as brochures, booklets and information on the web become irrelevant when a large proportion of the population is illiterate.
Some unscrupulous taxpayers exploit the general low literacy perceptions by not maintaining any business records or accounts when in reality many of them are fully capable or literate enough to do so. RRA needs to think of other methods to disseminate information such as running face-to-face seminars and workshops.
The bottom-line is that if taxpayers are struggling to stay alive, paying their taxes would be the last thing on their mind! They do not see taxes as an investment that might improve their future living standards.
The rise of e-commerce and internet communication is changing the nature of business (for example, it can involve intangible goods such as downloadable music) and makes it even harder for tax administrations to track and account for transactions. The deletion, hiding or encryption of electronic records by businesses also makes it difficult for tax administrators to uncover and follow the audit trail.
In some cases, the unemployed are used to smuggle goods, for example, high level of unemployment in border areas induce individuals to smuggle goods and evade customs duties and other taxes collected at customs. And there may be traders who involve in tax offences due to likely failures of their business and other individuals with marginal income who are not able to meet their expenses from their earnings. Otherwise the motive to commit tax offences is excessive enrichment.
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