February 11, 2019

Payback Time for Rwf 3billion Missing From Cooperatives, SACCOs

State prosecutors have compiled a list of 170 individuals to face the courts over various malpractices


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A timber cooperative in Musanze district has received tax invoice from the Rwanda Revenue Authority (RRA) asking for Rwf60m tax arrears. The problem however, is there is no record in the books of the cooperative of a business they conducted transactions worth this amount of tax.

The troubles of this cooperative ‘Koperative Tuzamurane Mpenge (KOTUM)’ are not unique.

A government report submitted to parliament last week by the ministry of trade and industry, which handles cooperatives, detailed serious issues in the sector including fraud, poor record keeping and corruption.

State prosecutors have compiled a list of 170 individuals to face the courts over various malpractices.

Nearly all include former heads of cooperatives, founding members or accountants hired by cooperatives to manage their finances.

For the case of KOTUM cooperative, one of its founding members and leader Nkundimana Jackson is one of those due in jail if it is proved he has a case to answer.

It is alleged that since the cooperative was established in 2014 dealing in timber and its byproducts, Nkundimana secretly shared the cooperative’s invoicing machine EMB with other cooperatives.

Instead of each cooperative filing separate sales receipts – on which the revenue agency RRA depends to calculate taxes, the suspects were depending on a single EBM machine. The practice was therefore defrauding RRA of millions in lost revenue.

But because the EBM machines are recorded on a particular taxpayer, all receipts released by Nkundimana and his accomplices, were recorded on the KOTUM cooperative account.

These receipts accumulated to the Rwf60m tax arrears.

Twizerimana Thomas, the current head of the affected cooperative said they cannot raise that amount of money even if they sold all property.

“Rwanda Revenue Authority should ask the criminal to pay those arrears since the police already knows him,” said Twizerimana.

The cooperative currently has 40 members.

Data from the Rwanda Cooperative Agency (RCA) shows there are more than 8,800 cooperatives spread across Rwanda involved in various income generating activities.

They are said to have assets worth over Rwf43 billion, but over the years, millions have been stollen or misappropriated.

Trade and industry minister Soraya Hakuziyaremye told a parliamentary committee on Friday last week that 174 individuals are facing prosecution for causing loss of Rwf1.3billion.

From this amount covering the period 2012-18, government has only been able to recover Rwf 214m.

In the SACCOs, the minister said some Rwf 1,7billion was missing. Prosecutors have only got back Rwf 240m from suspects and convicts.

The recovery is part of a government’s vigorous ant-corruption drive that has seen hundreds of officials fired, prosecuted and their property auctioned to pay back the monies.

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