Rwanda Tax to Play Key Role in 2022 / 2023 Fiscal Policy

Rwanda Tax to Play Key Role in 2022 / 2023 Fiscal Policy
  • For Rwanda’s 2022/ 2023 fiscal spending, taxation is expected to play a pivotal role in increasing internally generated revenue.

Rwanda Tax has rekindled attention to taking strategic attention to revive the nation’s taxation in the 2022 / 2023 fiscal year.

In specifics, the nation is looking at creating Incentives for some strategic sectors with the catch of promoting the production and consumption of made-in Rwanda products, boosting the nation’s economy.

The ease-of-doing business represents a major focus in the said budget that has projected to spend an estimate of Rwf4.6 trillion with expenditure reaching a sum of Rwf217.8 billion.

Rwanda’s source for funding the budget will involve non-tax collections such as visa charges, traffic fines and licenses. Tax sources will also involve the Value Added Tax, Income Tax and more.

Rwanda Tax: More Tax Drive

Taking a deep dive into realigning its tax administration, the government at the centre has highlighted that the whole tax reform is targeted at accommodating some of the tax incentives to be implemented under the regional EAC Customs Act.

According to the fiscal plan, rice will pay an import duty rate of 45 per cent ($345 per metric tonnes) instead of 75 per cent or $345/MT while sugar will pay an import duty rate of 25 per cent instead of 100 per cent or $460/MT.

Oil and soap will now pay 25 per cent instead of 35 per cent; second-hand clothes will pay $2.5 per kilo instead of 35 per cent while second-hand shoes will pay $5 per kilo instead of $0.4 per kilo or 35 per cent.

On the flip side, natural honey; doors, windows and their frames; steel tubes, wheelbarrows; and handbags with an outer surface of sheeting of plastics or textile material will be charged a 10 percent import duty increase all in the aim to grow local businesses.

A zero per cent import duty instead of 25 per cent is now allowed for importing military wares while . The duty rate for road tractors for semi-trailers saw a downward review to zero per cent instead of 10 per cent.

Motor vehicles for the transport of goods with a gross weight exceeding five tonnes but not exceeding 20 tonnes will pay an import duty rate of 10 per cent instead of 25 per cent.

Those with a gross weight exceeding 20 tonnes will be exempted from tax whereas buses for transportation of more than 25 persons will pay a duty rate of 10 per cent, instead of 25 per cent. Buses transporting 50 persons and above will pay a duty rate of zero per cent instead of 25 per cent.

However, capital machinery and raw materials used in the manufacturing of textile garments and footwear will pay an import duty of zero per cent instead of 10 per cent or 25 per cent.

Telecommunication equipment from within EAC is also exempted from paying import tax.

Rwanda Tax to Play Key Role in 2022 / 2023 Fiscal Policy
Rwanda’s President, Paul Kagame

Other Import Duties Captured

Smart cards, point of sale, cash registers, cashless machines and other devices used for electronic transactions will pay an import duty of zero per cent.

It is important to note that at the forefront of the regional tax review spearheaded by the East Africa Community since July 1st 2022, EAC is to ensure that the region promotes local content.

It has ensured that products such as construction materials, furniture, wine, and beauty and makeup products from countries outside the community because they are imported, will pay more taxes as per the latest EAC directive.

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