The Government of Rwanda has enacted new tax laws expected to generate Rwf300 billion over the next five years, with the aim of boosting economic growth and improving citizens’ well-being.
The tax reforms, which include both new levies and increases on existing ones, are designed to expand the tax base, enhance revenue collection, and support the country’s self-reliance agenda under the National Strategy for Transformation (NST2), which ends in 2029.
The legislative package, comprising 14 different tax laws, was submitted to and approved by Parliament following Cabinet endorsement.
New and Increased Taxes
Among the newly introduced or revised taxes are environmental levies on imported plastic-packaged goods, a tourism accommodation tax, and fuel surcharges earmarked for petroleum reserves and road maintenance.
Other changes include excise taxes on cosmetics, mobile phones, alcoholic and non-alcoholic beverages, tobacco, and gambling activities. Additionally, value-added tax (VAT) will be reinstated on certain technology products that had been exempt since 2012.
Cosmetic Products Taxed at 15%
A 15% tax will now apply to beauty and personal care products under the new excise tax law.
Annual Road Maintenance Levy
All vehicle owners will now pay an annual road maintenance fee. The charges are as follows:
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Sedan (Voiture) and Jeep: Rwf50,000
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Pick-up, Microbus, Minibus, and Bus: Rwf100,000
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Truck: Rwf120,000
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Small semi-trailer: Rwf120,000
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Large semi-trailer: Rwf150,000
Vehicle owners must declare and pay the fees by Dec. 31 each year. Exemptions apply to vehicles owned by the Rwandan government, diplomatic missions, and certain international organizations with agreements in Rwanda.
Additionally, a 15% levy will be added to the CIF price of imported fuel to fund road infrastructure.
VAT Reinstated on Mobile Phones and Tech Products
VAT on mobile phones, removed in 2010, will be reinstated. However, the government said it would continue to work with partners to promote access to smartphones and related technologies.
Excise duties on mobile phone airtime will increase gradually from 10% to 15% over three years — 12% in the first year, 14% in the second, and 15% in the third. As a result, the cost of calling is expected to rise from Rwf40 to Rwf42 per minute.
VAT exemptions for tech devices, lifted in 2012, have now been removed.
Higher Taxes on Tobacco, Alcohol, and Soft Drinks
Taxes on tobacco and alcoholic beverages will rise significantly:
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Excise tax on a pack of cigarettes will increase from Rwf130 to Rwf230, with an additional 36% of the retail price applied.
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Beer tax increases from 60% to 65%. For beer brewed with at least 70% local ingredients (excluding water), tax rises from 30% to 40%.
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Alcoholic beverages previously untaxed will now face a 65% excise duty.
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Soft drinks made from local fruits or vegetables will see a VAT increase from 5% to 10%, while others will be taxed at 39%.
3% Tourism Accommodation Tax
All accommodation service providers — from luxury hotels to budget lodgings — must now pay a 3% tourism tax on room charges, excluding VAT. Providers must file returns within 15 days after the end of each month.
Environmental Levy on Plastics
A 0.2% environmental tax will be imposed on imported goods packaged in plastic. These include bottled water, juice, energy drinks, non-alcoholic beverages, peanut butter, honey, cosmetics, shampoos, mattresses, clothing, shoes, all types of soap, and sanitary paper.
The tax will come into effect six months after publication in the official gazette.
Fuel Levy for Petroleum Reserves
To expand Rwanda’s petroleum storage capacity from 66.4 million liters to 334 million liters, the fuel storage levy has been increased from Rwf32.73 to Rwf50 per liter of gasoline or diesel. This measure is expected to raise Rwf5.2 billion annually.
Green Taxes on Hybrid and Electric Vehicles
Excise taxes on hybrid vehicles will vary based on age:
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Less than 3 years: 5%
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3 to 8 years: 10%
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Over 8 years: 15%
Fully electric vehicles, batteries, and charging station equipment will remain VAT-exempt until June 30, 2028.
Gambling Taxes Increase Sharply
Gambling companies will now pay a 40% tax on gross revenue, up from 13%. Winners’ prizes will also be taxed at 25%, up from 15%. These taxes must be paid within 15 days after the end of each month.
However, lottery services in which the government has shares, such as Lotto Rwanda, are exempt due to their contribution to public welfare programs.
