290 firms yet to certify their financial statements

Large taxpayers have failed to meet a government demand of certifying their past financial statements with the Institute of Certified Public Accountants of Rwanda (ICPAR), Business Times has learnt. Information from the Rwanda Revenue Authority (RRA) shows that as of September 16, 2009, only four out of the 300 large tax payers had declared their certified financial statements for the fiscal year 2008. The revelations were made in a recent meeting between ICPAR and the tax body. The deadline for declaring the results was extended to December 31, 2009 from June 30, 2009. A source who attended the meeting said that high certification charges were pointed out as the main reason for the delays in declaring financial statements. “Members have complained that they are charged lump sum figures ranging between Rwf2 million and Rwf15 million just to certify the accounts,” the source revealed on conditions of anonymity. The source added that it ICPAR has only 20 certified accountants with the right to certify statements acceptable by RRA, something that pushes certification costs high. It was however reported that ICPAR explained that taxpayers only use the certification cost as a scapegoat because they do not want their accounts certified due to the fact that they are afraid to get exposed in some instances. “ICPAR was requested to come up with a framework of operations for the audit officers,” the source added. A comment from the Director General of ICPAR, Fred Mujuni, could not be obtained as his phone kept ringing without being answered. However, the RRA Deputy Commissioner for Large Taxpayers, Ben Kagarama said that they expect taxpayers to declare certified statements since they still have time. “It is also obligatory by the law,” he explained. The requirement for certification of financial statements is provided for by law No.16/2005 of 18/08/2005 on direct taxes. It stipulates that failure to meet the deadline results into a penalty of Rwf500,000 for large tax payers, Rwf300, 000 for medium tax payers and Rwf100, 000 for small enterprises, in addition to a 0.5 percent net payment per month. The practice is also an international norm that has been embraced by all member states of the East African Community (EAC) to minimise errors in the taxpayers’ books of account. Ends

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290 firms yet to certify their financial statements