GEOMAPS v. RRA

# GEOMAPS v. RRA

- Source: Amategeko - Section: Decisions (Judgements) - Date: 2010-09-23 - Case/document no.: RCOMA 0059/09/CS - Collection: Supreme Court

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GEOMAPS v. RRA [Rwanda URUKIKO RW’IKIRENGA – RCOMA 0059/09/CS (Mukanyundo, P.J., Rugabirwa na Munyangeri, J.) 24/09/2010] Campain Law - Obtaining quality of the employer – Foreigners working for campain of another country must be under rules and regulation of that project- The Fact that Kenyan project which operated from Rwanda registered both in RIEPA and RRA gave quality of the employer to both Rwandans and Kenya. Tax Law – Paying taxes on foreign awards – Geomaps called upon its employees residing in Kenya for intervention in some difficult work from Kigali City. The company must pay taxes on that work though it payed their TPR in Kenya Revenue Authority. Law n0 08/1997 of 26th June regulating Taxes, article 53. Facts: RRA sued GEOMAPS AFRICA LIMITED in Commercial High Court asking taxes on awards (TPR) of its Kenyan employee. These workers were working on Kigali master plan measuring plots and digitalizing system of taxing plots using GIS (Geographic Information System.) After impromptu taxation, RRA taxed GEOMAPS 83.863.184 Rwf. Dissatisfied by this huge taxation, GEOMAPS advanced the case to Supreme Court saying that RRA taxed it unknown tax. It showcased that Kenyans it employ are paid from Kenya and it added that even their TPR goes to Kenya Revenue Authority. GEOMAPS speaker said that RRA mistook honorary it gave to its consultants to salaries. He explained that those are consultants not employees. He further made it clear that such taxation is done to someone who works for a salary. In response, RRA said that the company would pay TPR for Rwandans only and leave out Kenyan who had come to do what local employees had failed to do. On this note, GOEMAPS speaker said Kenyans employees had not would not be taxed since they would get their pay from Kenya and even their TPR would go to Kenya Revenue Authority. He went on saying that it Kigali City which would pay 15% of some honorary that it would give to GEOMAPS. In its response, RRA tax on awards must be paid companies or individuals that award for work done from Rwanda whether those who gets awards are Rwandans or not. GEOMAPS representative continued arguing that RRA did no show what it based on calculating that tax. He further said that the court disregarded Kenyans working for GEOMAPS had contract in Kenya and it is in this country that they get their pay from, and paid their TPR in Kenya Revenue Authority. In response, RRA said that those were not consultants but employees and that was shown by their name on the list showing even their number (18) and their salaries. Held :1.GEOMAP registered itself both in RIEPA and RRA and this gave it employ quality for all its employees no matter what nationalities. Also those Kenyan workers were its employ though they were getting their salary from Kenya. Thus, this company is an employer in Kigali City Project.

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2.GEOMAPS called upon experts from Kenya to intervene in work contracted by Kigali City. Therefore, the company had to pay tax for that work conducted from Rwanda regardless of paying their TPR in Kenya Revenue Authority. GEOMAPS appeal is received but no merit . GEOMAPS tax payment on awards to RRA which is equivalent to 83.863.184 Rwf. Court fees to Geomaps . Statutes and statutory instruments referred to: Law no 08/1997 of 26th June regulating Taxes, article 53. No cases was referred to. Judgment I.BRIEF BACKGROUND OF THE CASE [1] GEOMAPS AFRICA LIMITED was contracted from Kigali City to make Kigali City Master plan, measuring plots and making a digitalized system of taxing land and plots; using GIS(Geographic Information System) [2] RRA did an improvised taxation for TPR which was equivalent to 83.836.184 Rwf which GEOMAPS refused to pay. RRA then advanced the case to High Commercial Court which ruled out that the company had to pay the above mentioned amount. [3] GEOMAPS advanced the case to Supreme Court saying that the previous court disregarded its claim an supported RRA mistake of taxing it groundlessly. The company said that it had never paid any worker from Rwanda, and it added that the court rubbished evidence that was showing that those workers were working from Rwanda permanently. GEOMAPS also made it clear that those workers got their salaries from Kenya and that their TPR goes to Kenya Revenue Authority. [4] The trial was conducted in public on 17th August 2010 II. LEGAL ISSUE OF THE CASE a. Knowing if working procedure between Geomaps and its kenyan employees. [5] GEOMAPS’s Lawyer Nzamwita Toy said that the previous judge fell into RRA mistake of mistaking honorary it gave to its consultants from Kenya for salaries. He told the court that Kenyans Kenyans workers would come here to Rwanda as consultants. He mentioned of the imprompt taxation but said that this is done to an employer who pays TPR. He therefore said that those workers belonged to Kigali City under that circumstances.

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[6] RRA lawyer Speciose in response said that after signing a contract with Kigali city GEOMAPS employed local workers but it would secretly bring Kenyans workers to do what local employees could not do. In so doing it continued to pay PTR for local workers only and that is the reason why RRA decided to planned to tax them in the manner mentioned above. [7] In regard with finding out working procedure between GEOMAPS and its employees from Kenya, the court found out that basing on a letter Ndayisaba Fidel former Kigali City mayor wrote to RRA, GEOMAPS had registered in RIEPA as an entrepreneur and this company would bring workers from Kenya to Rwanda. The court found out that since GEOMAP registered both in RIEPA and RRA gave it audacity of being called an employer of both Rwandans and Kenyans. This is cemented by the fact that even those workers were the company employees in Kenya as it is indicated by their payment list. This makes it clear that it was an employer in the contract it had with Kigali City. b. Knowing if Geomaps was supposed to pay tpr for its workers from kenya. [8] GEOMAPS lawyer said that those workers would come to Rwanda but they were based in Kenya and this is where they would get their salaries and pay TPR from. He further argued that now that no Kenyans employees got their salaries from Rwanda and this means that they wouldn’t pay TPR. He further emphasized that Kigali City would pay 15% of the honorary that it would give to GEOMAPS before it pay them according to article 51 of law of 18/ 08/ 2005 which governs Tax. [9] The RRA lawyer said that tax on awards that GEOMAPS is taxed is of 2003 and 2004. Article 53 of law no 08/1997 0of 26/06/1997 which governs Tax. [10] Was used when the tax was to be paid. This is applied to individual or companies which give out awards for work done from Rwanda regardless nationality of awarded. [11] Based on what is stated in article 53 and explanation of RRA’s lawyer, it is clear that now that GEOMAPS would call upon its employ from Kenya to come and help in work it was working for Kigali City, it had to pay taxes regarding the work they conducted from Rwanda. The GEOMAPS argument that it paid TPR F for those worker in Kenya Revenue Authority rather than Rwanda Revenue Authority is illogical because it is contradictory to article 53 which deals with where the work is done from. [12] The court found out that the point which GEOMAPS bases its claim on that Kigali City was supposed to pay 15% of honory is illogical because the tax which is talked about here is TPR that GEOMAPS was supposed to pay for its workers as an employer. This therefore should not be confused for tax of article 51 of law 18/08/2005. Another important issue about this case is that GEOMAPS is asked 2003 and 2004 taxes and the law on which it build it claim started working in January 2006 after being taxed.

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c. To knowing if 18 workers list plays a role on taxing Geomaps. [13] Lawyer Nzamwita said that he does not know the ground which RRA based on calculating that tax which is equivalent to 83.863.184. He went on saying that the court disregarded evidence presented to it showing a list of 18 workers delivered on 17th January 2005. This list showed that the workers belonged to GEOMAPS and they were paying TPR to Kenya Revenue Authority. [14] Lawyer Gashabana stressed that the court had not value the list without making through investigation about it. He added that the judge contradicted himself by saying no evidence proven and the fact is that only one piece of evidence was needed and that was a concrete document showing that those workers were being paid from Kenya and that even their TPR were going to Kenya Revenue Authority. [15] RRA lawyer said what GEOMAPS said those workers who were on the list that it delivered to RRA on 17/01/2005 were not consultants but workers of GEOMAPS. This is proven by the fact that the list showed their names and salaries in US dollars. He further argued that the document that GEOMAPS regard as concrete evidence has no value as it gave it out after 7 months. Furthermore, it is contradictory to that of 17/01/2005 which it delivered while being assessed. [16] Though GEOMAPS insist on the fact that RRA made a mistake while taxing it; this is seen in the letter it wrote to RRA, the court found out that whatever GEOMAPS said is senseless since the people on list calling consultants are mere workers of it from Kenya who would frequent to Rwanda for intervention on what local workers could not do. Also GEOMAPS deliberately unveiled the document which gave a chance to RRA to base on it while taxing it based on article 29 of law 25/2005 of 04/12/2005 which governs process and procedure of taxing. All evidence that RRA gave out was enough to carry out an improvised taxing [17] The court stated that a list that GEOMAPS presented showing how it paid its worker and their TPR in Kenya Revenue Authority did not make sense in this case since as explained above, what it had to do was to comply with Rwandan laws on taxes as a legal employer in the country. [18] The court found out that since there are workers of GEOMAPS who worked in Rwanda, the company had to pay TPR for them in Rwanda. As a foreign employer, he had to comply with laws of the country he worked from including those governing taxes. With this therefore, GEOMAPS had to pay 83.863.184 Rwf as High Commercial Court concluded. The compensation which is equivalent to 10% of the tax it is asked does not deserve it since the court decision went against it. III. DECISION OF THE COURT [19] Court accepted GEOMAPS AFRICA Ltd since it is lawful though is no merit. [20] Decide that the court ruling has gone against GEOMAPS AFRICA Ltd.

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[21] Order GEOMAPS AFRICA LIMITED to pay Rwanda Revenue Authority taxes on awards (TPR) which is equivalent to 83.863.184 Rwf. [22] States that the case R.COM 0047/09/HCC conducted on 13/08/2009 remained the same. [23] Order GEOMAPS AFRICA LIMITED to pay court charges which is equivalent to 30.650 Rwf in 8 days. Failing to do so will result into evicting it from its property using the government enforcement.