Effectiveness of Rwandan Law of Tax Administration in addressing Tax Offences

ii. Statement of the problem

Taxes matter. People talk about them, complain about them, and try to dodge them when they can^2(*). Some always pay; some always cheat; and some cheat when they think they can get away with it^3(*). Businesses also react to taxes, both in how they organize their activities and, perhaps, in where they carry them out. How people and businesses react in turn affects the level and structure of taxation^4(*).

Tax evasion and related tax offences give rise to several legal questions; Whether Penalties and fines are well executed when tax offences are committed, Whether the Rwandan tax administration law fully addresses the problem of tax offences, whether Rwandan courts are strong enough to prosecute tax offenders, whether a `prevention is better than cure approach is applied by the tax administration to prevent tax offences before they are committed.

This research is therefore intended to find possible solutions for the above questions.

iii. Research Methodology

The following Research methods will be used:

1. Analysis of textbooks on taxation and tax administration;

2. Interpretation of Rwandan legal texts;

3. International Documentation of on Taxation;

4. Documentation from Rwanda Revenue Authority;

5. Electronic data related to taxation law; and

6. Legal texts of other countries.

iv. Objectives of the study

a. General objective

Objective of the study is to analyse the current situation of both civil and criminal responsibility in commitment of tax offences, identify the effectiveness of Rwandan tax administration law in addressing tax evasion. The result of this research will help tax administration to fight against different tax offences.

b. Specific objectives

The research study will highly focus on specific objectives particularly which will be to:

1. identify the concept of Taxation under Rwandan tax Law;

2. assess the degree of tax offences in Rwanda and investigate the causes and consequences of tax offences;

3. Identify legal control measures against tax offences, identify loopholes in controlling tax offences and recommend improvements in the current tax laws.

* ² An introduction to the Design and Development of Tax Policy in Developing and Transitional Countries, Richard M. Bird and Eric Zolt.

* ³ Administrative dimensions of Tax Reform, Richard M. Bird, April 2003

* ⁴ An introduction to the Design and Development of Tax Policy in Developing and Transitional Countries, Richard M. Bird and Eric Zolt.