14 November 2012

Rwanda: RRA in Taxation Row With Rice Importer

Kigali Commercial High Court last week ruled that Rwanda Revenue Authority (RRA) overtaxed Garibsons Commodities Central Africa Ltd, for imported rice.

The company has for the last two years, been battling it out with the tax body over the alleged over-taxation with the former seeking a refund of Rwf 212 million.

During the initial hearing the Pakistani firm claimed RRA was supposed to charge them custom tax of US$170 per tonne on the imported rice but they were charged US$362 per tonne.

The case made rounds in different courts until the Supreme Court ruled in favour of Garibsons and ordered RRA to refund the importer about Rwf212.8million.

However, RRA immediately contested the verdict, and requested for a retrial claiming they had discovered new evidence.

"In the process, as the commercial courts and the Supreme Court were hearing our case, our business was running, which is why we went back to the court to request that the rice we imported at the time the trial was on course also be taxed at the same rate as what the court had judged," said Suleman Butt, the company Managing Director.

"It's been about over one year since the Supreme Court ordered RRA to refund us but they have not given us a single coin," he said.

In a letter dated Feb 23, 2012 to RRA, Isaac Bizumuremye, the legal counsel of the importer, wondered why RRA had ignored the court order.

"Is your silence communicating to our client that RRA is a public body with enormous powers, machinery and resources, and above all, is above the law and cannot be bound by any court decision of the Supreme Court?" the letter seen by The New Times reads in part.

A week later, RRA responded saying the refund process had commenced.

However, in a surprise twist of events, on August 6, 2012, RRA wrote to Garibsons Commodities arguing that the company's request for a refund had some loopholes and they needed to conduct further investigations before taking a decision on whether to pay or not.

"... We regret to inform you that your request (for a refund) is not granted and you are required to clear your goods at the cost of $386 per tonne," a letter to the importer seen by The New Times says.

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