The leasing programme that was at the verge of collapse may not after all. Rwanda Commercial Bank (BCR) and Fina Bank have finally received their VAT refund claims.
The banks filed these claims a year ago, but the Treasury was holding up their capital, partly because Rwanda Revenue Authority (RRA) had not processed their VAT refund for 2007.
“I signed the cheques of over Frw400m (VAT) for both Fina Bank and BCR after auditing the transactions on leasing,” Celestine Bumbakare, commissioner domestic taxes yesterday said.
RRA insists that the delay to process VAT refund was partly due to the fact that banks had to be audited. And, that the country does not yet have appropriate laws to support the banks get their VAT refund on leasing.
But Hannington Namara, BCR marketing and communication manager said there is a law and that is why RRA audited their transactions recently.
Part of the law stipulates that before any taxpayer claims VAT refund of Frw500, 000 and above, they have to be audited.
David Kuwana, BCR managing director confirmed the VAT refund impasse had been sorted out with RRA, but hastened to say: “I have not seen the cheque yet.”
But Bumbakare said, he signed the cheques towards the end of last month. Efforts to get comment from Fina Bank were futile as top managers were reportedly locked in meetings.
In earlier interviews with The New Times, Banks had threatened to stop funding leasing saying it is not profitable.
Stev Caley, the managing director of Fina Bank had suggested that to avoid making further losses, his bank was planning to lease to only customers with collateral.
The bank had also plans to shift the VAT burden onto the final customer. Yet through leasing, banks provide cash to Rwandans without collateral to acquire assets.