Man held over Rwf861 million tax fraud

Police have arrested one Musa Mbarushimana for allegedly evading taxes, worth Rwf861 million, through manipulating Electronic Billing Machine (EBM) invoices.
A trader pulls a receipt out of an EBM. (File)
A trader pulls a receipt out of an EBM. (File)

Police have arrested one Musa Mbarushimana for allegedly evading taxes, worth Rwf861 million, through manipulating Electronic Billing Machine (EBM) invoices.

Mbarushimana was apprehended by the Revenue Protection Unit (RPU) on an arrest warrant issued by the National Public Prosecution Authority (NPPA) following an alleged tax fraud case filed by Rwanda Revenue Authority (RRA).

 

RPU is a Rwanda National Police unit attached to the tax body to detect, fight, prevent and investigate cases related to tax evasion and smuggling, among others.

 

The suspect was paraded before the media yesterday.

 

In 2012 and 2013, Mbarushimana registered two companies namely, Darko Limited, a hardware venture, and Eurobai Limited, which deals in general supplies, according to the Deputy Commissioner in charge of Taxpayer Services at RRA, Drocella Mukashyaka.

“He later acquired two EBMs for both companies. In reality, these companies never existed; since 2013 he was issuing invoices of goods that he never sold,” Mukashyaka said.

She explained that Mbarushimana was instead issuing and selling invoices to other business people charging them 1 per cent on every issued receipt, which amounted to Rwf861 million accumulated in the past two years.

“He sold EBM invoices to the traders who wanted to reduce on their output VAT (Value Added Tax) but our taxation system could report an error because there was no trace of the input VAT on his side. Sometimes he could even make transaction between his two non-existing companies so as to evade taxes,” said Mukashyaka.

She assured that the hi-tech facilities which RRA currently uses can track down such malpractices.

“This should serve as a lesson to those in the business community who are planning or are involved in such malpractices. We have no doubt, sooner or later, police will also locate and arrest others involved.”

The suspect, speaking to the media yesterday at RPU offices in Gikondo, corroborated Mukashyaka’s explanation.

“When I failed to start the businesses that I had registered, I resorted to this kind of malpractice, which I now regret; I advise anyone involved in similar offences to give up, otherwise there is no escape,” Mbarushimana said.

Police spokespersonAssistant Commissioner of Police Celestin Twahirwa said, “Such activities are against the law and impede the country’s growth plans, and Police will never tire to fight them.”

He cautioned the business community against getting involved in such and other illegal activities that “undermine the business climate of the country.”

“Investigations will continue in order to have everyone involved in similar malpractice brought to book,” he added.

Between 2007 and 2013 alone, the RPU recovered over Rwf4 billion that otherwise would have been lost through varied fraudulent businesses.

Between May and August last year, RPU also recovered about Rwf266 million in tax fraud.

editorial@newtimes.co.rw

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