Rwanda

In early 2025, Rwanda introduced comprehensive tax reforms spanning 2025 to 2030, including updates to value-added tax (VAT), excise duty, income tax, and the introduction of new levies. This has resulted in the following significant changes to Rwanda’s tax landscape: 

• Introduction of VAT on previously exempt items, including mobile phones, ICT equipment, fuel, fee-based financial services, and local transport of goods by road.

• Digital services tax (DST) introduced at 1.5% on income earned by foreign digital platforms operating in Rwanda with significant national presence.

• Capital gains tax (CGT) rate increased from 5% to 10%, with expanded scope to include more financial instruments, including debt, options, and licences.

• Excise duty amendments include:

• • Import of beauty products now subject to 15% excise duty.

• • Cigarettes taxed at 230 Rwanda francs (RWF) per pack plus 36% of retail price.

• • Beer excise duty increased from 30% to 40% for local and 60% to 65% for foreign brands.

• • Airtime excise duty to rise gradually from 10% to 15% by 2027.

• • New 15% excise duty on amount charged on financial transaction by 1 July 2027.
• Environmental levy of 0.2% on cost, insurance, and freight (CIF) introduced on selected single-use plastic imports.
• Introduction of a 3% tourism tax on accommodation services.

• Strategic petroleum reserves levy has been increased from RWF 32.73 per litre to RWF 50 per litre on petrol and gas oil.

• Introduction of a 15% road maintenance levy on petrol and diesel, the tax base being the CIF value of the imported fuel.
• Annual road use fee proposed at RWF 50,000 to RWF 150,000 per vehicle based on the vehicle type to support infrastructure funding.
• Gaming tax reforms:

• • Withholding tax (WHT) on winnings increased from 15% to 25%.

• • Gross gambling revenue tax for operators raised from 13% to 40%.

• • Businesses undertaking gaming activities exempted from corporate income tax (CIT).

• Hybrid vehicles remain exempt from import duty but are now subject to VAT and tiered excise duty (5% to 15%) based on age.

• Phase-out of VAT exemptions:

• • Machinery, capital assets, and raw materials used in industries will remain VAT-exempt up to June 2026.
  • Electric vehicles will become subject to VAT by July 2028.

• • Energy supply equipment will remain VAT-free until July 2028.

• Increase in the mandatory pension contribution from the 6% to 12% effective from January 2025. The rate will be increased to 14% effective from January 2027 and will progressively increase to 16%, 18%, and 20% annually between January 2028 and January 2030.