Social enterprises need to be transparent and accountable

Editor, RE: “Does Rwanda need a law on social enterprises?” (The New Times, January 15). The legal framework in place provides for tax exemption and the competent authority to grant the same is the Minister for Finance. In the circumstances, the onus is on the applicant to prove, based on law, that the enterprise merits tax exemption. Professional bodies, such as legal, medical, engineering, accountancy etc, engage in activities beneficial to the state and are set up by respective Acts of Parliament. One would be quick to term them non-profit makers, but that’s not so in Rwanda and the region. The tax regulatory bodies, in performance of their role, avoid loopholes that would occasion tax evasion. The only way round the problem, in light of no specific tax exemption laws, is to apply the requisite accounting and reporting principles. Enterprises shouldn’t report imaginary surpluses which the taxman will gladly pounce on. Not all cash generated by an enterprise is taxable income. Nor is the cash held at the end of a financial reporting period taxable surplus. When the enterprise is deemed transparent and accountable, the taxman would have no choice but to accept nil returns, year in year out. John

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Social enterprises need to be transparent and accountable