The dispute between the Rwandan government and exiled tycoon Tribert Rujugiro Ayabatwa has taken a new turn, with the Rwanda Revenue Authority saying he owes it an unspecified amount of money in tax arrears accrued between 2007 and 2009.
The tax body on August 25 released a list of over 200 tax defaulters, including foreign and domestic owned businesses, who owe the government over $78 million in unremitted tax.
The Union Trade Centre (UTC), a company owned by Mr Rujugiro —who until 2009 was President Paul Kagame’s economic advisor but later fell out with the regime — featured on the list.
UTC, which owns one of Rwanda’s premium malls, valued at $20 million, is currently run by the state through the Nyarugenge district Commission of Abandoned Properties. However, the businessman says the current development signals the government’s intention to fully take over his properties.
Mr Rujugiro says that it is a contradiction for the taxman to claim that UTC is a tax defaulter given that the government took it over two years ago, which technically means that the state should be “paying itself” taxes since it is managing the property.
“The plan is simply to portray me as a tax defaulter and tarnish my name. If the state is managing all my properties, why can’t they pay themselves the taxes they say I owe?” said the exiled businessman.
The tycoon said that the move is politically motivated and a plot by the state to fully possess his assets.
He added that the government collects over Rwf100 million ($141,511) monthly in rent from the over 80 shops in the mall and therefore can deduct its taxes and not include his name on the list of defaulters.
However, the Rwanda Revenue Authority dismisses claims of political witch-hunt saying that the tax arrears UTC owes date from 2009 backwards.
“He is a tax defaulter, like any other, living outside the country. The government through the Commission of Abandoned Properties put in place a caretaker of UTC in 2013 and from then on, there is no issue of non-compliance,” said the RRA Commissioner General Richard Tusabe on Thursday.
“The caretaker is compliant. What Mr Rujugiro owes are taxes dating back to 2009 and backwards,” he added, without revealing the amount of money involved. But sources at RRA say the tax arrears Mr Rujugiro owes the taxman are in excess of $1.5 million.
Mr Rujugiro is considered one of Africa’s richest men by Forbes Magazine, having made his fortune through the tobacco business, and with business interests in East, Central and Southern Africa and the Middle East.
President Kagame and Mr Rujugiro fell out in 2009 when the businessman was released from a UK jail, after a year in detention on charges of tax evasion filed by the South African government.
He was released after an amicable settlement of the dispute with the South African government which wanted him to pay up to $7.1 million and a fine following charges of fraud and tax evasion.
According to court records, the tycoon’s company Mastermind Tobacco SA (Pty) was also given a $30.7 million fine and a 5-year suspension.
Upon release however, Mr Rujugiro, one of the known financiers of the RPF liberation struggle, did not return to Rwanda, but went into exile in South Africa. In 2010, Kigali accused him of working with dissidents and rebel groups.
The businessman has on several occasions challenged the takeover of his assets categorised as “abandoned,” describing it as political persecution.
A statement released by the businessman following the announcement by RRA says that prior to the takeover, UTC was a highly successful entity hosting 81 businesses including top companies such as MTN Rwanda, Ethiopian Airlines and Nakumatt.
“Over 400 Rwandans earned a living in these businesses. UTC did not owe a cent to the tax authorities,” it says.
Dr David Himbara, an advisor to Mr Rujugiro, says that it is not logical for the government to say that the businessman’s properties are abandoned yet he had put in placemanagers to run them.
“Owners of almost all large Rwanda-based companies live outside the country,” Mr Himbara says, adding that the move is aimed at harassing and undermining the businessman.
Others on the list
The tax body maintains that it is not Mr Rujugiro alone on the list of defaulters because it includes over 90 other Rwandans, majority of who live outside Rwanda as well as 25 foreigners.
The defaulters list also includes a company identified as Business Rwanda registered under Leah Karegeya, the widow of the late Col Patrick Karegeya, the former renegade head of external intelligence, who was found murdered in a South African hotel at the beginning of 2014.