To further strengthen its economic resilience and promote self-reliance, the Government of Rwanda has introduced new tax policy reforms.
According to the Ministry of Finance and Economic Planning, these measures align with the Second National Strategy for Transformation (NST2) and aim to expand the tax base, enhance revenue mobilization, and streamline tax administration.
The government has introduced a 15% excise duty on the Cost-Insurance-Freight (CIF) value of cosmetic and beauty products, including make-up, body lotions, and hair products.
However, critical pharmaceutical beauty products will be exempted in consultation with the Ministry of Health.
To support infrastructure development and transport-related services, registration fees for all vehicles, including electric vehicles, will be increased.
The fixed fee of RWF 115 per liter has been replaced with a 15% levy on the CIF value of fuel to support road maintenance efforts.
Mobile phones, which have been VAT-exempt since 2010 to encourage digital inclusion, will now be subjected to VAT.
The government acknowledges the importance of digital accessibility and will work with stakeholders to ensure smartphone affordability and usage remain high.
After being exempted in 2012 to promote ICT adoption, VAT will be reintroduced on ICT equipment.
However, selected ICT devices will continue to be exempted in consultation with the Ministry of ICT and Innovation.
To promote responsible gambling, the tax on Gross Gambling Revenue (GGR) will rise from 13% to 40%. Additionally, the withholding tax on winnings will increase from 15% to 25%.
A new levy of 3% will be imposed on accommodation services to support investments in the tourism and hospitality sector.
To encourage eco-friendly transportation and reduce carbon emissions, hybrid vehicles will continue to benefit from a 25% import duty exemption.
However, excise duties will be introduced based on vehicle age: 5% for vehicles under 3 years old, 10% for those between 4 and 7 years old, and 15% for vehicles older than 8 years.
Additionally, a 5% withholding tax and VAT will be reinstated for hybrid vehicles, while electric vehicles will remain fully exempt to promote green transportation. These measures will take effect in the 2025/2026 fiscal year.
The government has implemented further excise duty increases on certain products.
The tax on cigarettes has increased from RWF 130 to RWF 230 per pack, plus a 36% tax on the retail price.
The excise duty on beer has risen from 60% to 65% of the factory price.
Airtime taxes have increased from 10% to 12% in 2024/2025, with a gradual increase to 15% in the medium term.
Further tax reforms will be introduced in financial services, transportation, and ICT sectors in the coming fiscal years.
These include an environmental levy on single-use plastics, VAT on select fee-based financial services, taxes on fossil fuels, and new levies on road transportation services.
To ensure a smooth transition, the government has planned extensive taxpayer awareness programs to educate citizens and businesses on the new policies.