Rwanda announces new tax reforms to boost revenue collection

The Rwandan government on Friday announced a wide range of tax reforms aimed at boosting tax compliance and helping to mobilize adequate domestic resources for the country’s sustainable development.

A statement issued by the Ministry of Finance and Economic Planning showed that the government has reduced corporate income tax from 30 percent to 28 percent and slashed taxes on high-end products to help boost the country’s tourism as well as Meetings, Incentives, Conferences and Exhibitions (MICE) sectors.

The latest announcement came days after the government on Wednesday announced a waiver of value-added tax on maize flour and rice in a move aimed at taming skyrocketing food prices in the country.

The “target is to reduce corporate income tax to 20 percent in the medium term to improve Rwanda’s competitiveness and position as a preferred African investment destination,” the ministry said in the statement Friday.

The new rate applied on land tax has been set between zero to 80 Rwandan francs (about 7 U.S. cents) per square meter down from zero to 300 Rwandan francs, while the tax rate for commercial buildings was slashed from 0.5 percent of its market value to 0.3 percent on both the building and land.

“Focusing on corporate income tax, value added tax and excise duty, the tax reforms will reduce tax rates, broaden the tax base, and improve tax compliance while ensuring that tax revenues increase by at least 1 percent of gross domestic product by the financial year 2025-2026,” the statement said.

The government also waived some fees previously charged by decentralized entities on documents or services. Enditem