Rwanda

Value-added tax (VAT)

VAT is levied on the supply of taxable goods and services, including online services, in Rwanda as well as on the importation of taxable goods and services into Rwanda.

The threshold for VAT registration is taxable turnover of RWF 20 million in any relevant year or RWF 5 million in a calendar quarter.

The standard VAT rate is 18% and applies to goods and services that are neither exempt from VAT nor zero-rated.

Services supplied are taxable if:

• The service recipient and the service provider are residents of Rwanda.
• The service recipient is a resident of Rwanda and the service is useful to the recipient in Rwanda.
• The service provider is a resident of Rwanda and the service is useful to the recipient in Rwanda.

Exports of goods and services are subject to VAT at 0%. Supplies to privileged persons, such as goods imported for official purposes of diplomatic missions, supplies made under special arrangements between the government of Rwanda and donors, and supplies or importation made under special technical aid agreements, are subject to VAT at 0%. Persons entitled to zero rating of goods or supplies received by them are required to pay VAT at the time of receiving the supply and then apply for a refund of the VAT paid or rather engage a revenue authority so they can affix a signature and a stamp on the VAT invoices so that the VAT is not paid on such invoices.

Some supplies are exempt from VAT, the main categories being supply of clean water service; goods and services for health purposes; educational materials and services; transport services except land transport; books, newspapers, and journals; financial and insurance services; lending or leasing interests in land or building for residential purposes; funeral services; energy supplies; lease of exempted goods; all unprocessed agricultural and livestock products; agricultural insurance services; gaming activities; goods and services for a special economic zone; goods sold in customs; aircraft and its spare parts/maintenance tools; and imported electric vehicles and accessories.

Suppliers who provide zero-rated services or goods are entitled to recover input VAT incurred in making the supply. This is unlike exempt supplies, where input VAT recovery is not allowed. Therefore, zero rating is preferable to exemption.

The VAT returns and relevant payment are due to the Rwanda Revenue Authority (RRA) on a monthly basis by the 15th day of the following month. However, for taxpayers whose annual turnover is equal to or less than RWF 200 million, the VAT declaration is done quarterly and the payment of the tax due is within 15 days after the end of the quarter. Voluntary VAT declaration on a monthly basis is, however, still admissible for taxpayers in this bracket.

Customs duties

Rwanda is a member of the East African Community (EAC), Common Market for Eastern and Southern Africa (COMESA), and African Continental Free Trade Area (AfCFTA). Common External Tariffs (CET) levied by all those economic blocks where Rwanda is part of are generally as follows:

• 0% for raw materials and capital goods.
• 10% for intermediate goods.
• 25% for finished goods.
• 35% – for "sensitive" or high-priority goods to encourage local production

Goods will only enjoy the preferential community tariffs if they meet the EAC Customs Union Rules of Origin.

Certain industries and items are also entitled to exemptions under the customs law (e.g. certain hotel equipment, solar equipment, computer software, and electric vehicles, spare parts, batteries, and charging station equipment).

Enterprises established in Free Trade Zones are exempt from customs duty on imports for exported products. There also exists an import duty remission scheme, where import duty may be waived for raw materials used to manufacture goods for export. This is subject to a requirement for proof of export and execution of the bond.

All imported goods, except those listed as exempt, are also subject to the 1.5% Infrastructure Development Levy (IDL) and the 0.2% African Union Levy (AUL). Additionally, imported goods, regardless of whether they are exempted, are subject to a 0.2% Quality Inspection Fee (QIF). The levies are computed on the customs value of imported goods.

Excise taxes

Excise tax is imposed on the manufacturing or importation of certain commodities, mainly soft drinks, bottled water, cigarettes, alcohol, fuels, and lubricants.

The following rates apply in respect of products and services for which excise duty is applied:

• Juice from natural fruits or vegetables: 10%.
• Soda, lemonade, and non-natural juices: 39%.
• Beer: 40% to 65%.
• Wine, brandies, liquors, and whisky: 40% to 70%.
• Cigarettes: 36% of retail price of a pack of 20 rods and RWF 230 per pack.

• Electronic cigarettes: RWF 30,000 per unit.
• Cigars and similar products containing tobacco or tobacco substitutes: 160%.
• Cartridge with liquid for use in electronic cigarette: RWF 24,400 per unit.

• Telephone communication: 12% ( June 2025); 14% (from June 2026) and 15% (from June 2027)
• Premium (excluding benzene) fuel and gas oil: RWF 183/litre on premium fuel and RWF 150/litre on gas oil.
• Lubricants: 37%.

• Sweets and chewing gum: RWF 322/kg.
• Chocolate: RWF 1,930/kg.

• Powdered milk: 10%.
• Vehicles with an engine capacity of above 2500cc or hybrid vehicles more than 8 years age from date of manufacture: 15%.
• Vehicles with an engine capacity of between 1500cc and 2500cc or hybrid vehicles more than 3 years but not more than 8 years age from date of manufacture: 10%.
• Vehicles with an engine capacity of less than 1500cc or hybrid vehicles not more than 3 years age from date of manufacture:  5%.
• Cosmetics and beauty products: 15%
• Amount or commission charged on financial transactions: 15% (effective 1 July 2027)

The following goods are exempt from excise duty:

• Goods for charitable organisations.
• Vehicles assembled in Rwanda.
• One personal vehicle of former diplomats returning from foreign diplomatic missions or an international organisation.
• One vehicle of Rwandan refugees or returnees from a foreign country who fulfil exemption conditions set forth under the Customs Law.
• Vehicles of the following categories: minibus and bus that can carry not less than 14 persons, lorries and single cabin pickups manufactured to carry goods, refrigerating vehicles, tourist vehicles, ambulances, and vehicles designed for persons with disabilities.
• Products specifically manufactured for export.
• Products sold to duty free shops and other specific persons legally determined.

Immovable property tax

The immovable property tax is assessed and paid by the owner, the usufructuary, or any other person considered to be the owner. The immovable property tax is levied on the market value of a building and surface of a plot of land.

If the immovable property consists of a plot of land that is not built, the tax on immovable property is calculated on each square metre of the whole surface of the plot of land. Where the immovable property consists of a plot of land, a building, and its improvements, the tax on immovable property for a plot of land is calculated separately on each square metre, while the tax on the building and its improvements is based on the market value.

The tax rate on buildings is determined as follows:

• 0.5% of the market value of both the building and a related plot of land for residential use. However, the Law offers special rates for residential buildings with the following features:

• A plot and a building of three floors that is used for residential purposes is taxed at the rate of 0.25% of its market value.
• A plot and a building for residential use with more than three floors is taxed at the rate of 0.1% of its market value.

• 0.3% of the market value of both the building and a related plot of land for commercial use.
• 0.1% of the market value of both the building and a related plot of land for industrial use, as well as buildings and plot belonging to micro enterprises and small business.

The tax rate on plots of land varies between RWF 0 and RWF 80 per square metre. Any undeveloped plot of land is subject to additional tax of 100% of what is arrived at using the rates per square metre.

For the first assessment cycle of five years, declaration of immovable property tax is made to the tax administration not later than 31 December of the first tax period. A new declaration of immovable property tax for the second assessment cycle and going forward will be filed not later than 31 December of the last year of each tax assessment cycle.

Transfer taxes

The sale of immovable property that is for commercial use results in immovable property tax at the rate of 2% where the seller is a registered taxpayer or at the rate of 2.5% where the seller is an unregistered taxpayer. This tax is on the amount in excess of the first RWF 5 million of the selling price.

Stamp taxes

There are no stamp duties in Rwanda.

Capital gains tax (CGT)

CGT is charged on the direct or indirect sale or transfer of shares, licenses, debt instruments, options, guarantees and similar assets. The CGT is charged at the rate of 10% of the capital gain. The capital gain is determined as the difference between the acquisition value of the instrument and the selling or transfer price.

CGT is required to be collected and remitted to the revenue authority by the company in which the share sale or share transfer transaction occurred. For the other instruments other than shares, this obligation lies with either the seller or buyer. 

CGT is required to be declared and paid within 15 days following the month in which the sale or transfer occurred by the company whose shareholding has been altered, the shareholder or buyer of the other instruments.

However, the following transactions are exempted from capital gains tax:

• Capital gains from the sale or transfer of listed shares and other securities on the capital market.
• Capital gains from the sale or transfer of shares or units of collective investment schemes.
• Capital gains resulting from restructuring of companies.

Corporate restructuring is defined to include the following:

• A merger of two or more resident companies into a separate company.
• The acquisition or a takeover of 50% or more of shares or voting rights by number or value in a resident company.
• The acquisition or transfer of 50% or more of the assets and liabilities of a resident company by another company.
• The acquisition or transfer of the entire company’s shares, assets, or liabilities so that its existence is replaced by the purchasing company.
• Splitting of a resident company into two or more resident companies.

Note that capital gains arising from the sale of commercial immovable property are subject to tax at the rate of 30%.

Payroll taxes

Employers are required to withhold tax on payments to employees in respect of employment services that they have rendered. The tax is withheld through the Pay-As-You-Earn (PAYE) system. The tax deducted should be remitted to the RRA by the 15th day of the following month.

Social security contributions

All people working in Rwanda, both nationals and foreigners, are required to contribute to a national social security contribution fund managed by the Rwanda Social Security Board (RSSB). RSSB has various mandatory contribution schemes including the pension scheme, occupational hazards scheme, community based health insurance scheme and maternity leave benefit scheme. The contribution rates, allocation and base have been summarised below.

Pension  scheme 

The pension contributions are undergoing amendments between 2025 to 2030.  effective 1 January 2025, the employer is required to contribute 6% of the employee’s gross salary to the scheme, while the employee’s contribution is also 6%. These rates are expected to change to change progressively as highlighted below:

• 12% equally split 6% (employer) and 6% (employee), effective 1 January 2025.
• 14% equally split 7% (employer) and 7% (employee), effective 1 January 2027.
• 16% equally split 8% (employer) and 8% (employee), effective 1 January 2028.
• 18% equally split 9% (employer) and 9% (employee), effective 1 January 2029.
• 20% equally split 10% (employer) and 10% (employee), effective 1 January 2030.

Gross salary means total remuneration received by the employee, including allowances, bonuses, commissions, transport allowances, and all other cash benefits, as well as any fringe benefits, but excludes reimbursement of business expenses and transport benefit in kind.

The social security contributions computed are required to be remitted to the RSSB by the 15th day of the following month.

Occupational hazards scheme

The Occupational Hazards Scheme is a mandatory social protection program managed by RSSB, designed to support employees who suffer work-related injuries, illnesses, or death.

• The employer is solely responsible for contributing to the scheme.
• The contribution is set at 2% of the employee’s gross salary.
• The employer is required to declare and remit the collected contribution to the RSSB by the 15th day of the month following the month to which the contribution relates.

Maternity leave benefits scheme

The law governing maternity leave benefits requires all employers and employees to contribute towards a maternity fund, which is administered by the RSSB.

The law grants employed women full monthly salary for the entire 12 weeks duration of maternity leave. The main requirements affecting employers are summarised below:

• The employer is responsible for collecting and remitting the contributions to the RSSB.
• The total contribution for maternity leave benefits is 0.6% of the contribution base. The employer and the employee are each required to contribute 0.3%.
• The contribution base is the gross pay to the employee, including benefits in kind, but excluding transport allowance, transport benefit in kind, termination benefits, retirement benefits, dismissal compensation, and any other allowances that have a compensatory character.
• The employer is required to declare and remit the collected contribution to the RSSB by the 15th day of the month following the month to which the contribution relates.

Community Based Health Insurance Scheme (CBHIS) contribution

The law governing the CBHIS contributions requires all employees to contribute towards the CBHIS fund, which is administered by the RSSB.

The main requirements are summarised below:

• The employer is responsible for collecting and remitting the contributions to the RSSB.
• The total contribution for CBHIS is 0.5% of the employee's net pay. 
• Net salary includes gross salary and all cash and non cash taxable benefits reduced by PAYE, pension contributions, Occupational hazards scheme contribution and Maternity Leave Benefits contribution. 
• The employer is required to declare and remit the collected contribution to the RSSB by the 15th day of the month following the month to which the contribution relates.

Digital services tax

Through a government gazette issued in May 2025 amending the Income Tax Law, Rwanda introduced a Digital Services Tax (DST) . This will apply at a rate of 1.5% on gross revenues sourced from Rwanda by companies supplying digital services with a substantial national presence in the country. Digital services are defined to include online advertising services, the supply of user data, online search engines, online inter mediation platforms, social media platforms, online media, digital content services, online gaming, cloud computing services and standardised online teaching services.

The tax will apply to non-resident digital service providers and aims to ensure fair taxation of income generated from Rwanda’s digital economy. The criteria of determining “substantial national presence,” and the procedures for registration, declaration, and payment are to be detailed in a Ministerial Order which is yet to be issued.

Environmental Levy on Plastic-Packaged Imports

Rwanda’s Environmental Levy on Plastic-Packaged Imports has the aim of promoting sustainable waste management and reducing plastic pollution.

• The levy is imposed at a rate of 0.2% on the customs value of specified imported items packaged in plastic materials.
• The levy is collected at customs.
• Items to which the levy applies include bottled water, juices, cosmetics, and household goods. The levy does not apply to pharmaceutical products or items exempted under the East African Community Customs Management Act, with the Minister in charge of taxes empowered to amend the list of affected items.

Tourism tax on accommodation

The Tourism Tax on Accommodation is a newly introduced levy that is aimed at supporting the growth and development of Rwanda’s tourism sector.

• All providers of accommodation services - including hotels, motels, lodges, guest houses, and apartments are required to charge and collect the tourism tax.
• Tourism tax applies at a rate of 3% on the room price exclusive of VAT.
• Accommodation providers are responsible for declaring and remitting this tax to RRA within 15 days following the end of each month. 

Road maintenance levy

The road maintenance levy is a statutory charge aimed at financing the maintenance of Rwanda’s road infrastructure. It applies to both fuel consumption and motor vehicle ownership.

Levy Rates

• Fuel Levy: 15% of the customs value of petrol and gas oil, inclusive of insurance and freight.
• Vehicle Levy: A fixed annual charge based on vehicle category:

• Fuel levies are collected at customs points.
• Vehicle levies must be declared and paid to the Rwanda Revenue Authority (RRA) by 31 December each year.

Exemptions

The following vehicles are exempt from the road maintenance levy:

• Vehicles owned by the Government of Rwanda.
• Vehicles of embassies, high commissions, and diplomats accredited to Rwanda.
• Vehicles of international organisations with formal agreements with the Government of Rwanda.

Trading licence fee

Districts charge a trading licence fee, which is paid by any person who commences a profit-oriented activity in Rwanda. The tax year starts on 1 January and ends on 31 December, and the trading licence fee must be paid for a whole year. If such activity starts after January, the taxpayer must pay a trading licence fee equivalent to the remaining months, including the one in which the activities started.

The tax declaration is made not later than 31 January of the year that corresponds to the tax period. The trading licence fee is calculated on the basis of turnover, and the amount of the fee varies between RWF 100,000 (for turnover of more than RWF 2 million) and RWF 2 million (for turnover of over RWF 50 billion).

The turnover applied is as per the amount approved in the previous year by the RRA. Every year, not later than 31 January, the RRA submits the necessary data to the concerned decentralised entity.

There are also different trading licence fee rates for other small traders. These include profit-oriented activities that are not registered on income tax that are in urban and rural zones, transporters of people and goods on vehicles, boats, and motorcycles.