Rwanda introduced five new tax laws on May 25, 2025, amending the VAT framework and establishing new levies, while presenting the 2025/2026 budget on June 12, 2025, with proposed customs duty reforms across multiple sectors.

New Tax Legislation

The May 25, 2025 laws establish an environmental levy on imported items packaged in plastic, introduce excise duties on specific goods, and implement levies on petrol and gas oil for strategic reserves. A tourism tax on accommodation services has also been established, alongside amendments to the existing VAT framework.

Customs Duty Reforms

Electric and hybrid vehicles continue to receive full customs duty exemptions, with electric vehicles valued at or below US$60,000 subject to a reduced EAC Common External Tariff of 25%, while those above US$60,000 remain fully exempt. Food security measures include reduced customs duties on rice to 45%, full exemption for wheat, and 25% duty on sugar.

Industrial support measures provide exemptions for heavy machinery and basic equipment in textile and footwear manufacturing, raw materials for local production, and digital payment tools. Road construction equipment receives 0% duty, while public transport buses with capacity above 25 passengers face 10% duty, with full exemption for those carrying 50 or more passengers.

Certain imported goods face increased duties, with steel tubes, wheelbarrows, and plastic or textile handbags subject to 35% customs duty, increased from the previous 25% rate.

Context

These reforms reflect Rwanda's broader economic strategy of promoting industrial development while addressing environmental concerns and food security. The differentiated approach to electric vehicle duties and industrial equipment exemptions aligns with regional sustainability goals and manufacturing sector development objectives.