Police investigations into abuse of taxation processes and systems has unearthed how some Rwanda Revenue Authority (RRA) employees connive with fraudsters in bypassing digital systems to evade taxes.
Investigations into the malpractices came to light as police followed a lead into a suspected corruption case.
“One person came to us claiming that she was being overcharged on vehicle taxes. She had sold off her vehicle that was once a cab, and in the process of transfer of ownership, she contact a broker to process the paperwork,” Senior Supt. Businge, the Commanding Officer (CO) of Revenue Protection Unit (RPU).
A broker identified as Andre Ntarundenga agreed to a deal and later returned to the client and informed her that her vehicle had an income tax debt amounting to Rwf320,000.
Ntarundenga convinced her that he would clear the tax and assist her with the required papers for only Rwf250,000.
The would-be victim, suspected something dubious. She notified the police, which started following up the case.
Ntarundenga had allegedly connived one Eugenie Uwayezu, an employee of RRA, who was handling the filing of transfer of ownership to manipulate the system.
How the system is manipulated
It is alleged that Uwayezu worked with colleagues in the revenue IT department to temporarily erase the tax debt on the Toyota carina RAB 406F so that the system could authorize the issuance of a new logbook, which they did.
Normally, for the new logbook to be processed, the system first detects if the automobile has no debt registered in the system.
However, it is said that the IT staff first erased the tax debt, which allows the system to process the logbook, and after which they entered the debt back into the system. That is how the money was embezzled.
“We are investigating this specific case, but also other similar fraudulent cases that might have gone undetected,” said SSP Businge.
“Actually investigations have revealed that the actual tax debt was Rwf97, 000 contrary to Rwf320, 000.”
SSP Businge warned that whoever is involved will eventually be brought to book and that consequences related to tax evasion or conspiracy to tax evasion are so high.
Reacting to the matter, the Deputy Commissioner for Taxpayer Services Department, Drocelle Mukashyaka advised taxpayers to avoid using brokers whenever they are processing any taxation documents unless they are officially authorized to do so.
“This is an isolated case, and the only one of the kind, which fortunate enough was also intercepted due to the partnership we have with Rwanda National Police through RPU. However, we encourage the public to always ensure they have proper paperwork. There is no service that is delivered without supporting documents or digital proof that the payment was done in an appropriate way,” she said.
With the help of RPU, the tax collection body has managed to recover billions of francs that would otherwise have been lost in the process.
Uwayezu is accused of conspiracy in tax evasion, a crime punishable with a prison sentence of up to two years and a fine equal to evaded taxes under article 369 of the penal code.
Under article 643 of the same law stipulates that “any employee who unlawfully accords or exempts fees, duties, taxes, fines, security and other required fees, gives free of charge or at a lower price, the delivery of public or private goods, shall be liable to a term of imprisonment of six months to two years and a fine of two to ten times the value of the exemption, the value of goods delivered free of charge or at a lower price or one of these penalties.