RRA set to auction UTC building over Rwf1 billion tax arrears, negotiations falter

Published by Mugabo Jean d’Amour
On 6 July 2017 saa 08:00
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Rwanda Revenue Authority (RRA) is following legal procedures to auction 39 properties including the Union Trade Centre (UTC), a property of Rwandan exiled tycoon, Tribert Ayabatwa Rujugiro and four other shareholders.

Rujugiro owns 97% of shares in the $20 million UTC while four others share the remaining 3% in shopping malls strategically located in city centre of Kigali, Nyarugenge District.

Speaking to IGIHE, Mr. Richard Tusabe, the Commissioner General of RRA, says none of the 39 seized properties that appeared on RRA’s announcement of 2nd May, 2017, has cleared tax arrears.

“Not any of the properties on the list has paid yet. We are following the due procedures. We shall auction them in accordance with the laws,” Mr. Tusabe said last week.

UTC is the only famous property that features on the list of seized properties and probably the sole abandoned property under government’s management.

Tusabe declined to give details on UTC tax arrears saying, “Wait until the auction time comes, we shall let you know.”

However, IGIHE has learned that UTC owes government a whopping sum of about Rwf1.2 billion, resulting from evaded taxes between 2007 and 2013, plus penalties.

UTC Manager, Alex Muhaya, said the management is dealing with RRA to see if the issue can get cleared before going into actual auction. However, the deadline seems to have expired, according to RRA’s announcement of May 2, which had given 15 days to property owners to pay taxes before going into auction.

“I don’t think it is important to disclose details about the issue per now. These details are in the interests of UTC shareholders, not for the general public. If it gets into auction, you get to know and if it does not, we shall have cleared the arrears. Let’s wait for RRA’s final decision to announce details,” said Muhaya, declining to give further details on the issue.

Fate of Rugiro dividends under district management

Vedaste Nsabimana, the Nyarugenge District Vice-Mayor for Finance and Economic Development who also chairs the abandoned properties management commission, told IGIHE he is aware of the on-going saga of UTC battling with tax evasion, saying that the commission will manage Rujugiro’s balance after deduction of taxes in case the property is auctioned.

“We manage dividends of Rujugiro only, not the entire UTC because it has other shareholders. We have paid all taxes since we took over the management of his dividends. UTC management can tell more about arrears and circumstances of their accumulation. But we have learned that they accumulated before we got into its management,” said Nsabimana.

Rujugiro’s dividends in UTC were put under government’s management in October 2013 as abandoned property because the owner left the country in 2009 after battling tax evasion in England.

The law of August 2015 on the management of abandoned properties authorises government to manage any immovable or movable property unrightfully possessed by others due to the fact that the rightful owners either died without leaving a legally recognised heir or do not reside in Rwanda for various reasons without having left behind a person legally authorised to manage their property.

The government decentralised the management of abandoned properties to special district commissions. Currently, Nyarugenge District manages 70 abandoned properties including 67 houses and three land plots. So far, six properties, formerly under the commission’s management, have been given back to owners.

Article 17 of the law on the management of abandoned property stipulates that a half of the amount collected from abandoned property shall be deposited on a fixed deposit bank account in the National Bank of Rwanda while the other half of that amount shall be deposited on a current bank account in the National Bank of Rwanda to be used in the maintenance and renovation of the abandoned property and tax payment.

If the owner of the property shows up, the law states, they shall be refunded the money from the fixed bank account after deducting 10% which is transferred to the public treasury account. The owner shall also be refunded any unused money from the current account.