Rwanda Implements Extensive Tax Reforms

In a momentous stride towards simplifying its taxation landscape, the government of Rwanda has enacted a set of tax laws, published in the Official Gazette n° Special of 14/09/2023. This progressive initiative reflects Rwanda’s steadfast commitment to streamlining its tax framework, with a view to nurturing a business-friendly environment. In the forthcoming articles, we will delve into the pivotal changes introduced by these reforms, shedding light on their implications and significance.

On 14/09/2023, the government of Rwanda officially gazetted the following tax laws:

Law Nº 051/2023 of 05/09/2023: Amending Law Nº 027/2022 of 20/10/2022: Establishing Taxes on Income Law Nº 049/2023 of 05/09/2023: Establishing Value Added Tax Law Nº 050/2023 of 05/09/2023: Establishing Excise Duty Law Nº 048/2023 of 05/09/2023: Determining the Sources of Revenue and Property of Decentralized Entities Key Changes to Note

Corporate Income Tax Rate Reduction

The corporate income tax rate has been reduced to 28%, down from the previous 30%.

Legalization of VAT Rebates

Value Added Tax (VAT) rebates are now officially recognized, with detailed operational guidelines expected to be provided through a ministerial order. Under this new provision, final consumers who present electronic invoices to the tax administration will receive rewards for the VAT paid on those invoices.

Excise Tax Adjustments

High-end products such as wines and liquors have seen a decrease in excise tax.

Decentralized Taxes

Several changes have been introduced in decentralized taxes, including the establishment of a tax on the sale of immovable property. This tax is levied at 2% of the sale value of commercial immovable property if the seller is a registered taxpayer for income tax. For individuals not registered for income tax, the tax rate increases to 2.5% on the sale value of immovable property.