The first version of the Electronic Billing Machines valued at about Rwf5 billion ($5.8 million) are set to be phased out by next year to pave the way for distribution of a new application.
The move is to ease VAT declarations, and boost compliance by taxpayers as part of the country’s major plan to ease the cost of doing business.
There are about 19,400 machines, which cost between Rwf200,000 ($231) and Rwf300,000 ($346) which are to be replaced by an internet-based software for VAT declaration.
Louis Kaliningondo, a Strategic IT adviser to the Rwanda Revenue Authority Commissioner General said: “The EBM was based on a technology that was relevant at the time but not so relevant currently given the new technologies entering the market now. They were turning obsolete.
“For instance, most people use computers, POS machines and the EBM machines, which make it too much hardware to use,” said Mr Kaliningondo.
“Given the fact that the EBMs were introduced in 2013, about 95 per cent of the machines we have are over three years old,” he added.
The new app will also make it easier for taxpayers to declare their taxes as they will have access to their data.
RRA technicians said the app will sharply reduce fraud, under declarations, which could boost VAT collections by 6 per cent but also helped taxpayers save time and money.
Last year, VAT collections reached Rwf352.4 billion ($407 million) last year.
With the new app, officials at RRA say taxpayers are saving 40 hours they used to spend filling tax returns after Rwanda rolled EBMs for value added tax declarations in 2012. The taxman said taxpayers who used to spend 45 days these days use five hours in a year.
RRA is working on new models of the software, which could see taxpayers use smartphones as well as versions for business outlets that have separate invoice techniques such as banks, insurance companies and hotels.