Members of Kigali Golf Club will have to go a while without their favourite sport following the closure of the facility that is currently struggling to clear tax arrears.

The closure of the club, this week stems from a tax audit exercise conducted between 2007 and 2009 upon which Rwanda Revenue Authority (RRA) discovered that there were unpaid taxes that have since accumulated to about Rwf200 million after factoring in interest and penalties. 

The club’s management says they did not consider themselves among the tax bracket as they are a non-profit institution.

The club president, Dr Richard Gakuba, said they have began consultations to lay grounds for negotiations with RRA to make clarifications and justifications with aims of reducing the payable amounts and coming up with payment schedules.

"Though we are a nonprofit, we also run a bar and restaurant. The Audit established that there are some amounts that will have to be paid. Proceeds from the bar and restaurant go into non-profit engagements, these are some of the clarifications we are still making hoping we can come to a common ground,” Gakuba said.

Among the petitions the club is preparing include, extending the time within the law, seeking reductions of the interest, penalties and the principle on the non-profit basis since.

"We will also petition the basis which the amounts could have accumulated, it could have been out of misunderstandings or challenges in bookkeeping which may not have been clear enough for RRA to establish taxable amounts,” he added.

As things stand, the club does not have enough funds to pay the arrears hence the search for ways out of the situation.

Other than contributions to establish how much they can raise, the club’s management is also considering approaching the Ministry of Finance and Economic Planning, and the Ministry of Sports and Culture, for possible interventions.

Tourneys at risk

The closure threatens to interrupt scheduled tournaments such as The East African Challenge, slated for August 25, and Rwanda Open due September 1.

Paul Mugambwa, a senior tax manager at PriceWaterHouseCoopers, a multinational professional services network, told The New Times that it is possible to get a tax payment extension period of up to 12 months if the club wrote to the Revenue Authority’s Commissioner General requesting to use the provision.

Mugambwa added that there is also a provision of a tax waiver if the enterprise is experiencing hardships and cannot make the payments.

"The RRA Commissioner-General can advise the Ministry of Finance that it be waived of as a liability. You need to demonstrate beyond reasonable doubt that you are not in position to pay up for that to happen. The minister then presents the petition to the Cabinet,” Mugambwa said.

However, he noted that professional input from tax experts in such a case could be of much benefit as it would enable them to effectively go through procedures of tax waivers, clarifications and management.

The club has been running since 1987 and has hosted numerous local and regional tournaments.

This newspaper sought clarifications on the arrears, interests and penalties accrued by the club from Rwanda Revenue Authorities, however, by press time, RRA Deputy Commissioner for Taxpayer Services department Drocelle Mukashyaka had not gotten back to us.

editorial@newtimes.co.rw