March 12, 2019

Cooperative Cleared of Paying Rwf 60m Tax Arrears After The Chronicles Story

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There are more than 8,000 cooperatives across Rwanda like this coffee team. Despite the good intention of the cooperative movement, they have become ‘eating’ grounds for leaders instead of all the members

A cooperative in Musanze district, Northern Province, will not be paying Rwf 60msupposed tax arrears it had been asked by the Rwanda Revenue Authority (RRA).

The Rwanda Cooperative Agency – which oversees the sector intervened in favour of the affected KOTUM cooperative after the story published by in The Chronicles on February 11 according to members of KOTUM.

The tax body dragged the cooperative KOTUM to court last year for failing to pay its dues since it was established in 2014. Court was presented with invoices which showed the cooperative had conducted business on the RRA-provided invoicing machine called EBM.

However, it was discovered in court proceedings that former leaders of the cooperative who are facing prosecution had used the same EBM to transact business for 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.

However, because the EBM machines are recorded on a particular taxpayer, all receipts released by the suspects, were recorded on the KOTUM cooperative account and these receipts accumulated to the Rwf60m tax arrears.

The suspects being prosecuted are Nkundimana Jackson and Barabwiriza Ange.

The Rwanda Cooperative Agency helped KOTAM members to file an appeal to the High Court in Musanze district, which ruled yesterday March 11 that the 40-member cooperative was innocent of the tax fraud.

The High Court ordered that the tax arrears be paid by Nkundimana and Barabwiriza.

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, the same billions have been stolen or misappropriated by mainly leaders of the cooperatives. Dozens are in jail, and hundreds more risk years behind years, and their property confiscated.

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