Unit 5: Taxes and Customs Procedures
Key unit competence
To be able to interpret tax computations and declare goods/services from
customs.
Introduction
You were introduced to taxes and customs procedures in O-level, this implies
that the knowledge, skills, and values acquired in relation to taxes will help
you to understand the concepts throughout the unit. This unit will concentrate
more on the different types of taxes collected locally and on cross-border
trading activities and their computations.
Introductory Activity
Read the following extract and answer the questions that follow.
A tax is a fee without a direct exchange requested to the members of the
community by the State according to the law, to financially support the
execution of the government tasks and taking into account the contributive
capacities of the payer.
Taxation in Rwanda dates way back to 1912 when property tax was
introduced. Since then, different taxes have been born and reformed to
broaden the tax base, reduce tax rates, and reduce tax evasion among
others.
Comprehensive tax reforms as approved by the cabinet (april 21st 2023)
Cabinet approved comprehensive tax reforms following directives issued
by the President of the Republic in January 2023, and in line with the revised
Medium-Term Revenue Strategy (MTRS) passed in May 2022.
Focusing on Corporate Income Tax (CIT), Value Added Tax (VAT), and Excise
Duty, the tax reforms will reduce tax rates, broaden the tax base, improve
tax compliance, and curb tax evasion while ensuring that tax revenues
increase by 1% of GDP by FY 2025/26. Additionally, a review has also
been conducted of the existing taxes and fees collected by decentralized
entities.
Key Changes to the Tax Code
VAT: Government will exempt VAT on rice and maize flour for both domestic
trade and imports. The move is expected to improve food security and the
school feeding program.
Corporate Income Tax: The Government is reducing the corporate income
tax statutory rate from 30% to 28% with an eventual target of 20% in the
medium term. This will improve Rwanda’s competitiveness and position
the country as a preferred African investment destination.
Excise Duty: To boost Rwanda’s tourism and MICE industry, the Government
has adopted changes on the taxation of high-end products, especially
beverages. For instance, under the new reforms wine will be taxed up to
FRW 50,000 of value meaning that the excise duty cannot exceed FRW
35,000 per liter (70% of FRW 40,000).
Property tax and rates on land tax: According to the approved tax reforms,
the new rate applied on land tax has been set between FRW 0 to 80
FRW per square metre from the initial FRW 0 to FRW 300 rate. A second
residential house will be taxed at 0.5% of the combined market value of
the house and land. The Tax rate for commercial buildings is reduced from
0.5 % to 0.3% of its market value on both building and land. Tax charges
on commercial buildings are capped at FRW 30 billion.
Tax on sale of immovable property: This levy will be applied at 2% of
the property value for registered taxpayers and 2.5% for non-registered
taxpayers. The first five million of the sale of every immovable property
will be tax-exempt.
Trading License: Businesses and traders will pay a single trading licence
tax, that combines market and public cleaning fees. Businesses with more
than one branch will pay only one licence per district.
Waived fees: Some fees previously charged by decentralised entities (on
documents, or services) have been scrapped. The government has put in
place a number of measures to ensure that the proposed changes lead to
a stable revenue growth path in the medium term.
Note to editors: The MTRS aims to implement several reforms that
contribute towards the sustainable development of the country by
mobilising adequate domestic resources (taxes) while creating a modern,
equitable, and efficient.
Questions
a) Given that taxes in Rwanda date back to 1912, why do you think
people and businesses have to pay taxes?
b) Mention some of the taxes that have been reformed according to the
extract.
c) Name any other taxes being paid in Rwanda that are not identified
above in the extract.
d) Classify the above taxes identified in c & d as direct or indirect taxes.
5.1. Meaning of concepts and classification of taxes in Rwanda
Learning Activity 5.1
Analyse the following dialogue and use it to answer the questions
thereafter:
Paul: Hello Juliet, do you have some time?
Juliet: Yes.
Paul: Thank you. Since you work with Rwanda Revenue Authority, I need
some help from you.
Juliet: I have heard of the tax reforms. But before you tell me about tax
reforms, what is the meaning of a tax, and what types of taxes are paid
in Rwanda?
Paul: Ooh, a tax is a mandatory financial charge imposed by the government
on individuals and businesses to fund public expenditures and programs.
Juliet: Thank you, Paul. But may you also talk about the types of taxes.
Paul: Okay. Let us start with the simple ones. There are taxes paid on:
land, employees, goods and services, exports and imports, among others.
Next time when we have enough time, I will tell you more about taxes in
Rwanda.
Juliet: Alright, thank you so much. This was very informative. But before
you go, what are direct and indirect taxes?
Paul: Okay, Direct taxes are taxes paid on profit or any income. For
example: Pay As You Earn (PAYE), Corporate Income Tax (CIT), Capital Gain
Tax, Personal Income Tax (PIT), Rental Income Tax, etc… Indirect taxes are
levied on consumption of good and services. Basically, in Rwanda we have
two types of indirect taxes: Value Added Tax (VAT) and Excise Duty
Juliet: Thank you so much, this has been very helpful.
Paul: It has been a pleasure meeting you, Juliet.
Questions
1. According to the dialogue, what do you think a tax is?
2. With examples, make the difference between direct tax and
indirect tax
5.1.1. Meaning of concepts
Tax is a mandatory financial charge imposed by the government on individuals
and businesses to fund public expenditures and programs. It can also refer to
a fee without direct exchange requested to the members of the community
by the State according to the law, to financially support the execution of the
government tasks.
Taxation refers to the act of levying or imposing taxes by the tax authority.
It can also be defined as a legally compulsory transfer of money from the
public to the government mainly as a source of government revenue. It is
also defined as the compulsory payment to the government for the payment
or provision of voluntary consumption of goods and services.
Customs are government agencies responsible for regulating and facilitating
the movement of goods across borders. They are a crucial part of international
trade, as it ensures that goods entering or leaving the country comply with
relevant laws and regulations, including those related to tariffs, duties, taxes,
and safe standards.
5.1.2. Classification/ types of taxes imposed on business in Rwanda
In Rwanda taxes are classified as below:
A. Direct taxes
Direct taxes are taxes charged on the income or profits of the person to the
government.
It is the tax where the liability as well as the burden to pay resides on the
same individual and . In general, direct taxes are levied on profit and income.
Examples of Direct taxes
i) Corporate income tax: Is a tax that must be paid by an entity or
a corporation based on the amount of profit generated. Corporate
income tax is deducted by the state on industrial and commercial
income achieved by the firms working as commercial companies.
The corporate income tax is paid by:
◾ Companies established in accordance with Rwandan law or foreign
law;
◾ Cooperative societies and their branches;
◾ Legal persons and public institutions with autonomy of management
As of April 21st 2023 the Government reduced the corporate income
tax statutory rate from 30% to 28% with an eventual target of 20%
in the medium term. This will improve Rwanda’s competitiveness and
position the country as a preferred African investment destination.
ii) Trading license
◾ It is a tax paid by everyone who commits himself to do income-
generating activities, organizations with legal personality, or
organizations subject to corporate income tax.
◾ It is paid before starting activities.
◾ It is paid every year not later than 31st March with ongoing
business.
Businesses and traders pay a single trading license tax that combines
market and public cleaning fees. Businesses with more than one branch
pay only one license per district.
iii) Personal income tax is a tax imposed on the income earned by
individuals. It is a direct tax levied by the government on various
sources of income, such as salaries, wages, self-employment earnings,
rental income, investment gains and other forms of personal income.
For example PAYE (Pay-As-You-Earn
Broadly, PIT is charge on the following sources of income:
◾ Income generated from performing services (including
employment)
◾ Activities of a craft person, singer, artist or player
◾ Sports, cultural or leisure activities
◾ Income of Rwanda permanent establishment
◾ Income from the use, lease and disposal of movable assets by
Rwandan business
◾ Sale, lease and free transfer of immovable Rwandan business
assets
◾ Farming, fishing and forestry
◾ Usufruct (right of use of asset) and other rights attached to
Rwandan Business assets
◾ Income from investment in share (i.e., dividends)
◾ Sales or transfer of shares and debentures (capital gains tax)
◾ Change of partnership profit into shares, such that a partner’s
interest increases
◾ Distributions of partnership profits to partners
◾ Income from lending and deposits(interest)
◾ Transfer, sales and lease of intellectual property
◾ Other income generating activities that are not classified as exempt
iv) Withholding tax: This is a tax that is deducted or withheld from an
individual’s income or payment by a third party and paid directly to the
government on their behalf.
Withholding taxes are composed of: Pay as you earn, dividends,
interests, performance payments made to an artist, musician, or an
athlete;
Apart from the withholding tax on salary (PAYE) paid according to
above mentioned, others are paid on a rate of 15%;
The rate of the tax withheld on commodities from abroad is 5%.
This tax can be exonerated (temporary exemption) to taxpayers in
detention of a quitus fiscal.
A quitus fiscal is a certificate issued by RRA. It is issued to taxpayers
who have manifested high integrity in their transactions.
A withholding tax on public tenders is 3%.
Note: Those who have the obligation to withhold withholding taxes
are required to pay withheld taxes within 15 days counted from the
day of withholding.
v) Rental income tax:,
Rental income tax is paid by any individual who earns income from
renting out fixed assets located in Rwanda, including land, buildings,
and improvements.
In Rwanda, rental income tax is calculated progressively by revenues
brackets as follows: 0% on the bracket lower than 180,000 Rwf ; 20%
from 180,001 Rwf to 1,000,000 Rwf ; 30% above 1,000,000 Rwf.
vi) Property tax and rates on land tax -the rate applied on property and
land is as follows:
◾ Land tax is FRW 0 to 80 FRW per square meter.
◾ A second residential house will be taxed at 0.5% of the combined
market value of the house and land.
◾ The Tax rate for commercial buildings is 0.3% of its market value
on both buildings and land.
◾ Tax charges on commercial buildings are capped at FRW 30 billion.
Other types of taxes that are not levied in Rwanda:
◾ Inheritance tax is determined by who owns the property after the
decedent. It is also known as death tax.
◾ Gift tax is when someone transfers certain valued property to another
person. It could be cash or in-kind.
B. Indirect tax
A tax imposed on consumption, sales, shipping, or production, rather than
directly on the property or income of the consumer. Indirect taxes are
generally included in the price of goods and services. In this case, the burden
of the tax is on final users of the product or service, the consumer.
Examples of Indirect tax;
i) Value Added Tax (VAT)
VAT was introduced in Rwanda in 2001. VAT is a tax on the consumption
of goods and services. It is indirectly paid by the final consumer of the
goods or services. However, it is paid on their behalf by taxpayers on
the value added at each stage of production.
In Rwanda, the normal rate of VAT is 18%. There is also a zero rate
(0%) and exemptions applicable for certain types of goods and
services. A taxpayer must register for VAT if his turnover is above FRW
20,000,000 for any twelve-month period or above FRW 5,000,000 for
three consecutive quarters. In addition, any taxpayer may choose to
register voluntarily for VAT if he doesn’t meet the threshold
VAT-registered taxpayers are required to have at least one Electronic
Invoicing System (EIS), such as an Electronic Billing Machine (EBM) in
each of their sales locations, and use these to provide EIS invoices for
all sales transactions.
In addition to other products, on April 21st 2023, the government
exempted VAT on rice and maize flour for both domestic trade and
imports. The move is expected to improve food security and the school
feeding program.
ii) Customs duties: This is the tax imposed on imports and exports. They
include:
◾ Import duty: This is the tax imposed on imported goods to;
a) Get government revenue
b) Discourage imports so as to protect domestic industries
c) Discourage imports so as to conserve foreign exchange
◾ Export duty: This is a tax imposed on exports to raise revenue and
discourage the exportation of certain goods in order to satisfy the
local market demand.
◾ Excise duty: Excise tax is imposed on specified goods /service
produced locally or imported to be consumed in the country. Excise tax
was established in Rwanda in 1960 and is levied on locally produced
beers, lemonades, mineral water, juices, liquors, wines, fuel, vehicles,
powdered milk, as well as on cigarettes, etc… and their imported
counterparts if appearing on the list published in the consumption
tax law. Excise tax is also levied on telephone communication since
year 2007.
Application Activity 5.1
Read the following business activities in Rwanda and name the types of
taxes they pay
5.2. Role of taxes, and computation of VAT and personal
income tax
Learning Activity 5.2
Paying taxes plays a great role in the social and economic development of
the country. Using the specific examples from the photo below, explain the
contribution of taxes to Rwanda’s social economic development.
5.2.1. Role of taxes
Taxes paid by entrepreneurs, corporations, organizations play several
important roles in the economy and society. Here are some key roles of taxes:
To an entrepreneur
◾ Paying taxes by the entrepreneur helps the business activity to
operate smoothly, as it does not face penalties and associated costs
from the RRA for non-payment.
◾ When an entrepreneur pays taxes, it improves his/her reputation or
public image which may result into increased customers and better
services from the government
◾ To avoid inconveniences of closure of the business and its associated
costs: when an entrepreneur fails to pay assessed taxes, his/her
business is subject to penalty or even closure in some cases.
◾ Entrepreneurs benefit from infrastructures to successfully operate
such as roads to move raw materials, finished goods, workers; security
for their enterprises, goods, among others, which are provided by the
government.
◾ Paying taxes means contributing money to government agencies or
departments such as Development Bank of Rwanda (BRD), Business
Development Fund (BDF), which support entrepreneurs to operate
business activities through soft loans and other financial support.
To the government
◾ Source of government revenue: taxes are the main source of
government revenue to finance its public expenditure. Thus taxes
enable the government to pay it workers, construct roads, maintain
security, provide health care, education among others
◾ Taxes benefit the Rwandan government to meet its objectives and
goals such constructing affordable houses to the citizens which helps
improve the standards of living
◾ Taxes help government to finance its policies especially on poverty
alleviation through programs such as ―GIRINKA, ―VUP, ―UBUDEHE
among others
◾ Taxes enable the government to regulate the prices of goods and
services in the country hence ensuring a low cost of living and
maintaining the standards of living of the citizens
◾ Taxes enable the government to maintain a balance between the
poor and rich. The government uses the taxes from business people
to provide services needed by the poor, which otherwise the rich
could not provide.
◾ Taxes enable the government to promote its industrialization policy
through reducing products from other countries that would otherwise
out compete the home industries.
◾ Taxes enable the government to ensure that the citizens have enough
products. This can be through taxes charged to reduce products
moving out of the country or removing taxes on goods needed in
the country. This helps maintain a high standard of living
To the Society
◾ There is reduced rates of poverty among the community due to a
significantly equal distribution of income through various activities
and projects set by the government
◾ Improved wellbeing among the vulnerable and elderly as they benefit
from the different government financed through taxes
◾ Reduced infant mortality rates and increased life expectancy due to
improved access to health facilities and services
◾ Increase in the percentage of the population that completes secondary
and TVET education, reducing the literacy levels, improving on the
peoples‘ skills through programs such as 12YBE.
◾ Increased community/social solidarity, general happiness, life
satisfaction, and a significant more trust among the community
members and for public institutions.
◾ Taxes are charged on products which are harmful to discourage their
usage hence controlling the over-exploitation of resources hence
protecting the environment which is vital for the existence of society
5.2.2 Computation of VAT
Example 2
UTEXRWA Industry bought cotton from a local farmer worth FRW 1,200,000 to
manufacture 170 blankets. All the blankets were sold to a wholesaler based
in Kigali City at a cost of FRW 4,000,000. The same blanked were supplied at
FRW 8,000,000 to Lemigo Hotel for its daily hotel services. You are required
to compute the following with consideration that invoices are VAT inclusive:
◾ VAT payable by UTEXRWA Industry◾ VAT payable by the wholesaler
Solution:
◾ At UTEXRWA level, VAT = (4,000,000 x 18) / 118 = 610,169.49
◾ At the level of the wholesaler, we must consider two VATs: VAT on
purchase and VAT on sale:
AT on purchase = (4,000,000 x 18) / 118 = 610,169.49
VAT on sale = (8,000,000 x 18) / 118 = 1,220,338.98
Thus, VAT due from the wholesaler is 1,220,338.98 – 610,169.49 = 610,169.52
Example 3
A students’ business club has sold goods to XY enterprise at 100,000 FRW
VAT exclusive.
Calculate:
a) VAT to be paid
b) The price VAT inclusive
Solution
a) VAT received= 18,000FRW
b) The price VAT inclusive=100,000FRW+18,000FRW=118,000FRW
5.2.3. Computation of personal income tax
The tax rates and income tax brackets can vary depending on the country
and its tax system.Personal income tax in Rwanda is calculated as below ;
Note: During 2023 as per income tax law in force (Law No
027/2022 of 20
October 2022, the tax rates on employment income are as follows;
◾ RWF 0 to 60,000 - 0%
◾ RWF 60,001 to 100,000 - 20%
◾ RWF 100,001 and above - 30%
From 2024 and the following years as per the new tax policy(April 2023), the
tax rates on employment income will be as follows;
◾ RWF 0 to 60,000 - 0%
◾ RWF 60,001 to 100,000 - 10%
◾ RWF 100,001 to 200,000 - 20%◾ RWF 200,001 and above - 30%
A professional income tax or PAYE (Pay-As-You-Earn)MONTHLY TAX RATES
Example 1
AKAGERA BUSINESS GROUP has made a list of employees indicating their
monthly income:
AKALIZA gets FRW 250,000
AKIMANA gets FRW 360,000
ANGELINE gets FRW 100,000
ASSOUMPTA gets FRW 24,000
Required: Compute the following:
i) The amount of professional income tax to be deducted on the salary
of each employee.ii) The total amount of tax on all employees to be paid
Skills Lab Activity
From what you have learnt;
1. Identify taxes that your club will pay based on the project
activities?
2. Assuming that your future back home business employs an
accountant who will be paid 300,000FRW per month, How muchtax is to be paid to the government every month?
Application Activity 5.2
1. The following figures relate to the monthly salaries of
DUKUNDANE company ltd employees for 2019:
a) Director Kagabo John earns 350,000FRW
b) Accountant Mukama James earns 150,000FRW
c) Security Muhire Damien earns 30,001FRW
d) Secretary Keza Joana earns 77,000FRW
e) Casual laborer Ishimwe Anitha earns 150,000FRW
Required: Determine the total PAYE for the above employees that
DUKUNDANE company ltd pays to RRA every month
2. A students’ business club has bought goods from XY enterprise at
1,000,000 FRW VAT included.
Calculate:
a) VAT paidb) The price VAT excluded
5.3. Customs DeclarationLearning Activity 5.3
Fig 5.3: People clearing at the customs office in Rwanda (Source: www.newtimes.rw
Analyze the photo above and respond to the following questions:
1. What is happening in the photo?
2. Where in Rwanda do such activities / operations take place?3. Mention some documents that are used in such activities above.
5.3.1. Customs declaration
Customs declaration refers to the practice used by customs offices to clear
goods into a country and levy tariffs including clearance procedures such as
documentation and inspection, method of determination of goods clarification,
and method of assigning its value as the base for taxation. This declaration
happens at border posts and other customs offices like MAGERWA.
5.3.2. Customs Offices in Rwanda
Rwanda Revenue Authority (RRA) that was established by law N0 15/15 of
8th November 1997, therefore, all border areas of Rwanda with neighboring
countries and airports are gazetted as customs offices.
The Current operational One Stop Border Posts (OSBP) are located at the
Kigali International Airport, Rusumo, Kagitumba, Nemba, Gatuna and Ruhwa.
Other active border posts are located in Cyanika, Rusizi I, Rusizi II, Bugarama,
Akanyaru, La Corniche & Petite Barrière in Rubavu and others.
All in all, Rwanda Revenue Authority has got the following Customs Officescountrywide:
5.3.3. Documents used in customs declaration
These are documents that are used during the declaration process of exports
and imports as some may have limit or customs excise duty or are banned
from entry. These may include:
1. Transaction Invoices: is a non-negotiable commercial document issued
by a seller to a buyer.
2. Transport documents: These are documents which show information
about cargo that is being transported. Transport documents lie at the
heart of international trade transactions. These documents are issued
by shipping line, airline, international trucking companies, railroad,
freight forwarder and all logistics companies. For example:
◾ CMR: the CMR (Convention relative au Contract de transport
international de Merchandise Par Route) transport document is
an international consignment note used by drivers, operators and
forwarders that govern the responsibility and liabilities of the parties
to a contract for the carriage of goods by road internationally.
◾ Air waybill: is a transport document used for air freight. An air
waybill (AWB) is a non-negotiable transport document covering
transport of cargo from the airport. It indicates only acceptance of
goods for carriage. This document is prepared by IATA Transport
Agent or the airline itself and is addressed to the exporter, the
airline and the importer.
◾ Bill of Lading is a transport document for sea freight. Bill of lading
B/L is used by the agent of a carrier to shipper, signed by the
captain, agent, or owner of the vessel.
3. Import license: An import license is a document issued by a national
government authorizing the importation of certain goods into its
territory.
4. Packing list is a more detailed version of the commercial invoice but
without price information.
5. Certificate of origin: show that goods in particular shipment have been
wholly obtained, produced, manufactured or processed in a particular
country.
6. Certificate of analysis is a document which confirms that specific goods
have undergone specified testing with specified results and adhere to
product specification and standard of production.
7. Goods arrival notice: is a document sent by a carrier or agent to the
consignee to inform about the arrival of the shipment and number of
packages, description of goods, the weight, and collection charges (if
any)
8. Assessment Notice: is a document issued by a taxing authority
specifying the assessed value of a property.
9. Certificate of Fumigation: is the proof that wooden packing materials
issued in international sea freight shipping e. g wooden pallets and
crates, wood, wool etc. Have been fumigated or sterilized prior to
international shipment to ensure proper handling as some can be
harmful.
10. Goods invoice: is a document sent by a seller to a buyer. It specifies
the amount and cost of goods that have been provided by a seller.
11. Payment receipt: is a simple document that shows that payment was
received in exchange for goods or services.
12. Phytosanitary certificate: is a certificate stating that a specific crop
was inspected a predetermined number of times and a specified
disease was not found or a certificate based on an area surveillance
stating that a specific disease, as far as known, does not occur in the
area of production.
13. Warehouse handling fees invoice: is a document given by a
warehouseman for items received for storage in his or her warehousewhich has evidence of title to the stored goods.
Application Activity 5.3
Analyze the following transactions and identify the documents used during
their declaration.
1. Bought goats from Uganda
2. Sold coffee to Japan
3. Boughts woods from China4. Bought Rice and Maize flour from Tanzania
5.4. Declaration procedures
Learning Activity 5.4
You have been employed as the export manager of TAM TAM industries
producing cosmetics products and in your exportation plans, you intend toexport 6 tonnes of products in one week’s time to South Sudan.
Rearrange the processes you will take to clear your products under customs
1. Obtain an invoice for warehouse handling fees.
2. Pay import tax.
3. Submit goods arrival notice for verification from Rwanda
Standards Board.
4. Obtain goods exit note
5. Obtain manifest Requirements.
6. Submit import documents to the clearing agent for tax calculation.
7. Obtain notice of arrival of the goods.
8. Pay warehouse fees for goods handling.
Customs declaration may be done both for exports or imports. Although the
procedures may slightly differ based on the type of declaration, the general
procedure when declaring imports or exports is as follows:
Step 1: Taxpayer prepares all necessary documents and contracts a Clearing
Agent.
Step 2: The Clearing Agent prepares and submits an import or export
declaration to RRA using the Rwanda electronic Single Window (ReSW).
Step 3: The Clearing Agent receives assessment notices, containing the
amounts of customs duties due. The taxpayer pays all customs duties due,
either directly or through the Clearing Agent. The assessment notice may
contain different ‘Doc IDs’ for different tax types. If so, these must each be
paid separately.
Step 4: The ReSW system allocates the consignment to a certain Customs
channel. If verification is required, Customs Officers will request the
necessary documents and/or access to the consignment. If there are any
problems, further action may be required.
Step 5: After successful verification, the Customs Officer provides the
taxpayer with a release order.
Step 6: The taxpayer pays any due warehousing fees, if applicable, to the
warehouse owner.
Step 7: The taxpayer receives an exit note and may leave with their
consignment.
Imports declaration procedures
1. Obtain notice of arrival of goods: The requirements for goods arrival
notice are set by internal procedures of Magasins Généraux du Rwanda(MAGERWA) or any other wharehouse / logistics organization.
2. Submit goods arrival notice for verification by Rwanda standards
board(RSB). Requirements are set by internal procedures of Rwanda
bureau of standards import inspection procedures.
3. Obtain manifest: Rwanda revenue tally officer verifies whether the
goods indicated on the import documents match the actual goods on
the goods arrival notice. This is to make sure that the importer pays
the right amount of taxes.
4. Submit import documents to the clearing agent for tax calculation. It
is at this stage that the taxes to be paid on the goods is calculated and
the importer is informed of how much taxes they have to pay.
5. Pay import tax: The clearing agencies have a system whereby goods
are assigned different codes and once this code is entered into the
system and the country of origin of the goods, taxes are calculated
automatically. Large importers who had been previously paying taxes
well may be exempted from withholding taxes.
6. Obtain an invoice for warehouse handling fees: The requirements
are set by the internal procedures of Magasins Généraux du Rwanda
instructions.
7. Pay warehouse fees for goods handling: Warehouse handling fees
are set by MAGERWA management. The fees depend on the quantity
of the goods and the time spent in the warehouse. Within 7 days, each
kilogram is charged 10 RWF per day. From 7 days and above, an extra
1 RWF is charged per kilogram/day. VAT (18%) and parking fees are
added on the total cost.
8. Obtain goods exist note: Once the taxes and warehouse storage
fees have been paid, Rwanda Revenue Authority and MAGERWA tally
officers verify the goods physically to make sure they correspond to
the declared goods and the client issued with the goods exit note. It
is the goods exit note that the client uses to take his goods from thewarehouse.
Application Activity 5.4
Imagine that you had to export raw materials for your business to Dubai.Describe the procedure you would go through.
End of Unit Assessment
1. Project Activity
Imagine that after S.6 you have been provided with capital of 1000,
000FRW by your parents or relatives to begin the business of importing
Rice from Tanzania. This involves different procedures to have your
Rice reach Rwanda especially in clearing under customs. Using the
knowledge and experience acquired from the previous lessons, make
a report on the process of declaring taxes under Customs.
II. Other Assessment Questions
1.
a) Differentiate between customs and customs procedures
b) Give three examples of Rwanda’s imports and exports
c) List examples of exempted goods that are imported into
Rwanda.
2. A business club at one of the schools has 3 regular employees
namely KALISA, Ingabire, and BERWA with monthly salaries of
35,000FRW, 40,000FRW, and 20,000FRW respectively. On top
of that, the business made sales of 300,000FRW VAT exclusive,
and the input VAT was 34,000FRW.
a) Calculate the total amount of tax that the business club has
to pay to RRA
b) Advise the above business on how the above taxes would bepaid.