As Rwanda continues to modernize and align its fiscal policies with economic goals and regional standards, the government has introduced significant tax reforms through several new laws and ministerial orders. These changes, effective from April to July 2025, aim to expand the tax base, promote sustainable practices, and enhance public infrastructure financing.
Here’s a breakdown of the most impactful updates every citizen, business owner, and investor should know:
- Value Added Tax (VAT) Changes
Law nº 009/2025 brings the following key shifts:
- Phones and ICT equipment are no longer VAT-exempt. However, ICT items used in education, agriculture, health, and aid-funded projects remain exempt.
- Goods transport services are now being taxed under VAT, effective 1st July 2025.
- Consumers can now earn rewards for paying VAT; a 10% cashback, and up to 50% of the seller’s penalty if they report businesses refusing to issue EBM invoices.
- Excise Duty Increases & New Targets
A new Excise Duty Law (Law nº 011/2025) adjusts tax rates across various products to boost revenue and influence consumer habits:
- Beer: General/ ad-valorem rate increased from 60% to 65%. However, Beer whose local raw material content, excluding water, is at least 70% by weight of its constituents is taxed 40% from 30%.
- Cigarettes: A hike of specific rate from 130 RWF to 230 RWF per pack, keeping the 36% ad-valorem rate. This aims to discourage consumption and generate revenue for health investments.
- Airtime: A progressive rise from 12% to 15% over three years. That is 12% for the first year, 14% for the second, and 15% for the third year and the following years. This increment is for the purpose of aligning with regional practices.
- Cosmetics & Beauty Products: Now subject to 15% excise duty. However, Pharmaceutical beauty products are to remain exempted.
- Hybrid Cars: hybrid cars were previously VAT and excise duty-exempt. The changes impose VAT of 18% and excise duty of 5%, 10%, or 15%, depending on the age of the vehicle. That is a 5% duty on vehicles with 0-3 years, a 10% duty on vehicles with 4-7 years, and a 15% duty on vehicles with 8+ years.
- Lubricants or fluids for motor Vehicle and machinery maintenance are also subject to a 37% excise duty.
- Juices: a 39% excise duty was imposed on juices.
Exempted goods from Excise Tax
- Goods for charitable organizations
- One personal vehicle of a former diplomat returning from foreign diplomatic mission;
- One vehicle of a Rwandan national returning from a foreign country who fulfils exemption requirements provided for in EAC CMA
- Minibus and bus that can carry not less than 14 persons
- Lorries and single cabin pick-ups manufactured to carry goods
- Refrigerating vehicles
- Tourist vehicles;
- Ambulances and vehicles designed for persons with disabilities
- Products sold to duty free shops and other specific persons determined by relevant Laws.
- Environmental Levy on Imported Plastics
0.2% of CIF value was imposed on imported plastic packaged goods, including:
- Water and juice,
- Mattresses, clothes,
- All types of body lotions,
- Petroleum jelly and shampoos
- Toilet papers,
- Peanut butter, honey and derived products
- soaps.
- Fuel & Strategic Reserve Levies
law Nº 012/2025 of 27/05/2025 increases of the Fuel Levy from 115 Frw to 150 Frw per liter and the Strategic Reserve Levy from 32.73 Frw to 50 Frw per liter. This aims to support road maintenance, expand fuel storage capacity, and ensure fuel security taking into account the current reduction in fuel consumption due to e-mobility.
- Motor Vehicle Registration Fees
Ministerial Order Nº 003/25/10/TC OF 16/04/2025 determines vehicle registration fees based on vehicle’s engine capacity as follows:
| Engine power (cc) | Before (Rwf) | New fee (Rwf) |
| 0-1000 | 75,000 | 75,000 |
| 1001-1500 | 160,000 | 285,000 |
| 1501-3000 | 250,000 | 445,000 |
| 3001-4500 | 420,000 | 748,000 |
| 4501 and above | 560,000 | 997,000 |
| other | 640,000 | 1,000,000 |
| Electric vehicles | new | 285,000 |
| All electric moto vehicles | new | 75,000 |
Note: The registration fee for a vehicle with a personalized number plate is FRW 5,000,000
- Annual motor vehicle road user charges
A Road User Charge is an annual fee for vehicles to finance road maintenance and infrastructure improvement.
Fee Structure:
- Cars & Jeeps: Frw 50,000
- Microbuses, Minibuses, Buses & Pickups: Frw 100,000
- Trucks & Half Trailers: Frw 120,000
- Trailers: Frw 150,000
Note: Government vehicles, High commissions, embassies and diplomats accredited vehicles, and international organizations vehicles are exempted from these charges.
The levy is declared and paid annually to the Tax Administration not later than 31 December of each year.
- Tourism Tax on accommodation
A 3% tax on accommodation exclusive of VAT.
A taxpayer ought to:
- To register for the tourism tax on accommodation
- To charge the tourism tax on accommodation;
- To remit the tourism tax on accommodation to the Tax Administration
- To declare the tax after the end of the calendar month
- To pay the declared tax within 15 days following the month of declaration.
The tax reforms present both challenges and opportunities. While consumers may feel the impact through increased prices, the reforms aim to establish a broader and fairer tax base, encouragement of local production, and promote sustainable economic development.
Businesses and individuals are strongly advised to stay informed and comply with these changes
