The Rwandan government has unveiled a series of tax hikes set to take effect in the 2024/25 fiscal year, targeting multiple sectors to boost revenue and align with economic policy goals.
VAT Returns on ICT Equipment
One of the key changes is the reintroduction of Value-Added Tax (VAT) on mobile phones and ICT equipment, reversing exemptions granted in 2010 and 2012.
However, some IT equipment will remain VAT-exempt, based on discussions with the Ministry of ICT and Innovation.
Higher Vehicle Registration Fees and Import Duties
The government plans to increase registration fees for all vehicles, including electric models.
New hybrid vehicles will continue to enjoy a 25% import duty exemption. However, older hybrids will now be taxed as follows:
- 5% import duty for vehicles under three years old.
- 10% import duty for vehicles aged 4-7 years.
- 15% import duty for vehicles older than eight years.
Additionally, VAT and a 5% withholding tax will be reinstated for all hybrid vehicles. Electric vehicles will remain fully exempt from taxes. These changes will take effect in the 2025/26 fiscal year.
Fuel Tax Shift to Percentage-Based Levy
The current fuel levy of RFW115 (USD 0.08) per litre will be replaced with a 15% charge on the CIF (Cost, Insurance, and Freight) value, potentially increasing fuel costs.
New Excise Duties on Beauty Products
The government is introducing a 15% excise duty on the CIF value of make-up, body lotion, and hair products. Certain items deemed essential by the Ministry of Health will be exempt.
Higher Taxes on Gambling Winnings
The gambling industry faces steep tax hikes, with the gross gambling revenue tax rising from 13% to 40%. Additionally, the withholding tax on winnings will increase from 15% to 25%.
Tourism Sector Levy
A new 3% tax will be imposed on tourism accommodation, further impacting the hospitality industry.
Upcoming Tax Reforms in Key Sectors
The government has also signaled further tax adjustments in financial services, transportation, and ICT, which will roll out in future fiscal years. These include:
- An environmental levy on single-use plastics.
- VAT on certain financial services, fossil fuels, and road transportation of goods.
These tax measures reflect Rwanda’s ongoing efforts to expand its revenue base while balancing economic growth and environmental policies. Businesses and consumers should prepare for the impact of these new tax policies in the coming fiscal years.
