Executive summary

The Government of Rwanda has gazetted Ministerial Order No. 001/24/03/TC of 08/03/2024, determining modalities and conditions for taxpayers to benefit from voluntary disclosure incentives.

In a bid to enhance and improve overall tax compliance, a three-month one-off opportunity has been introduced, effective from 22 March 2024 to 22 June 2024, for individuals, companies and organizations to disclose applicable historical undisclosed/unpaid tax liabilities.

The voluntary disclosure applies to all tax types, except customs duties, for periods prior to the tax year of January to December 2023.

This Alert highlights the key provisions under the gazetted Ministerial Order No. 001/24/03/TC.

Detailed Summary

Scope of application (Article 1)

This Order applies to:

1. Registered taxpayers who voluntarily disclose and pay the due tax that they did not pay before being notified of imminent audit
2. Taxpayers not registered with the Tax Administration who voluntarily disclose and pay the tax due
3. Taxpayers registered with the Tax Administration who voluntarily disclose and pay tax after the time limit for audit of such tax
4. Taxpayers registered with the Tax Administration not provided for in subparagraphs (a) and (c) of this Article who voluntarily disclose and pay tax within the announced period for voluntary disclosure

Requirements for requesting voluntary disclosure (Article 2)

The applicant for voluntary disclosure should indicate:

1. The relevant tax type and period
2. The tax due, along with related supporting documents

Note: Voluntary disclosure does not create a right to any refund of input tax or tax credit. The tax period provided for in Paragraph 1 of Article 2 must correspond to at least one tax period prior to the deadline for declaration and payment of the tax due. Currently, the voluntary disclosure will be applied for periods prior to the tax period January through December 2023.

Modality of voluntary disclosure (Article 4)

A taxpayer who wishes to declare and pay a tax that had not been timely paid must apply to the Tax Administration through an online system established by the Tax Administration (eTax).

Time limit for decision communication (Article 5)

The Tax Administration shall assess the taxpayer's application of voluntary disclosure of the unpaid tax and shall respond within 30 days from the date of receipt of such application.

Tax payment (Article 6)

1. A taxpayer who is granted the voluntary disclosure incentives must pay the total amount of principal tax disclosed within 30 days from the date of approval.
2. The Tax Administration may allow the taxpayer to pay disclosed tax in installments within six months from the date of approval of the application where the taxpayer has presented valid reasons.

Waiver of penalties and interests for late payment

The taxpayers are expected to disclose all material facts regarding the taxes not paid and will be granted relief of automatic waiver of penalties and interest for late payment of such taxes.

Next steps

The Tax Administration will provide further details of the voluntary disclosure application process and guidelines on payments in due course.