Rwanda has introduced sweeping tax and customs reforms for 2025/2026, targeting revenue growth, environmental protection, and support for key sectors including tourism, transport, and digital technology.

Rwanda has implemented a comprehensive package of tax and customs reforms for the 2025/2026 fiscal year, aiming to boost domestic revenue, promote environmental sustainability, and support priority sectors such as tourism, industry, and digital transformation. The changes are outlined in newly enacted legislation and the national budget.

  1. Income and Withholding Taxes
  • Hybrid vehicles: Now subject to a 5% withholding tax (previously exempt).
  • Gambling: Withholding tax rate increased from 15% to 25%.
  • Capital gains: Tax rate doubled from 5% to 10%.

     2. Value Added Tax (VAT)

  • Mobile phones and ICT equipment: Now subject to 18% VAT (previously exempt).
  • Goods transport services: Now taxed at 18% VAT.
  • Hybrid vehicles: VAT exemption removed; now taxed at 18%.
  • Electric vehicles: Remain exempt from VAT until 30 June 2028.
  1. Excise Duties and Customs
  • Fuel: Previous fixed rate of Rwf 115/litre replaced with:
      • 15% of customs value, plus
      • Rwf 183/litre for petrol and Rwf 150/litre for diesel.
  • Hybrid vehicles: Now subject to 5%–15% excise duty based on vehicle age (previously exempt from import duty).
  • Electric vehicles: Continue to benefit from excise and import duty exemptions until 30 June 2028.
  • Cosmetics: Now face a 15% excise duty, excluding medical/pharmaceutical products.
  • Tobacco products: Excise increased to Rwf 230 per pack plus 36% of retail price (up from Rwf 130 per pack).
  • Beer: Excise duty raised from 60% to 65% of the factory price.
  • Airtime: Excise duty increased from 10% to 12%, with a further rise to 15% anticipated.
  • Gross gambling revenue: Tax rate jumped from 13% to 40%.

  1. New Levies and Sectoral Charges
  • Tourism: A new 3% tourism tax applies to accommodation charges (excluding VAT).
  • Road usage: Annual road user levy introduced, ranging from Rwf 50,000 to Rwf 150,000, depending on vehicle type.
  • Environment: New 0.2% environmental levy imposed on imported goods packaged in plastic.