A Critical Analysis of Effectiveness of Tax Offences Control Mechanisms Under Rwandan Law

II.5. Settlement of disputes

The application of the tax laws is source of a lot of litigations and disputes between the tax administration and the taxpayer. This is because in many cases these parties are in disagreement as each party believes that it has been injured by a decision taken the other party. Settlement of these disputes has two phases; namely, Administrative appeal phase and judicial appeal phase.

II.5.1 Administrative Appeals

When a litigation concerning application of tax law occurs, the taxpayer has the right to introduce the case before the competent tribunal. However, the case cannot be lodged in the courts unless the case has not been settled on administrative level.

1. Appeal to the Commissioner General

The taxpayer, who has a period of seven (7) days from the receipt of the note of assessment in order to pay for the tax due to the National Treasury, has also thirty (30) days from the date of receipt of this note a right to appeal to the Commissioner of RRA if he is not satisfied with the contents of tax assessment notice^53(*). The objective of this appeal to the Commissioner General is to contest the amount of tax assessed. It should be noted that this appeal does not suspend the obligation to pay tax, interest and penalties. However, upon the written request by the taxpayer, the Commissioner General may suspend the disputed amount of tax for the duration of the appeal^54(*).

The Commissioner General makes a decision on the appeal within a period of thirty (30) days and sends it to the taxpayer. The Commissioner General may extend this period once for another thirty (30) days and informs the taxpayer. When no decision is taken within this period, the appeal is assumed to have a basis. When the appeal is found to have a basis, the Commissioner General discharges the taxpayer from the respective tax liability, interest and penalties^55(*).

Concerning decentralized taxes, the law provides that `If the taxpayer is not satisfied with the decision taken by the Council, he/she refers the matter to the courts. In that case, the confiscation of assets is suspended until the courts have given their verdict^56(*)'. However, this law does not specify the period for appeal.

2. Appeal to the Appeals Commission

The taxpayer who is not satisfied with the decision of the Commissioner General may appeal to the Appeals Commission (formerly appeals council) within thirty (30) days after receipt of the decision of the Commissioner General^57(*). This Commission is instituted by the Prime Minister's Order No 08/03/2007 on Establishment, Composition and Functioning of Tax appeals Commission.

The tax Appeals Commission is responsible for settlement of disputes between the tax administration and taxpayers who are not satisfied by the decision of the Commissioner General^58(*).

The Tax Appeals Commission shall be composed of the Minister having Finance in his attribution or his delegate who is also the Chairman, a representative from Rwanda Revenue Authority, who is the Secretary, and three other members appointed from amongst persons with reputable integrity that have been proven to be highly knowledgeable in commercial, financial and legal matters as well as in any other relevant field, nominated by the Minister having Finance in his attributions.

The taxpayer who is not satisfied with the decision of the Commissioner General appeals to the Appeals Commission within thirty (30) days after receipt of the decision of the Commissioner General^59(*). The Appeals Commission makes a decision on the appeal within a period of sixty (60) days (after receipt of decision of the Commissioner General) and sends the decision to the taxpayer in writing. When no decision is taken within this period, the appeal is assumed to have a basis^60(*).

When the appeal has been fully or partially accepted, the Appeal Commission will discharge the taxpayer from the respective tax liability, penalties and interest accordingly. The Appeals Commission will notify the Tax Administration of the decision in writing.

* ⁵³ Article 30 of LTP

* ⁵⁴ Article 31 of LTP

* ⁵⁵ Article 31 of LTP

* ⁵⁶ Article 33 of law no 17/2002 of 10/05/2002 establishing the source of revenue and its management

* ⁵⁷ Articles 34 of LTP

* ⁵⁸ Article 1 of Prime Minister's Order No 08/03/2007 on Establishment, Composition and Functioning of Tax appeals Commission

* ⁵⁹ Article 34 of LTP

* ⁶⁰ Article 37 of LTP