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Rwanda Slashes Customs Duty to Ease Price Rises

by Jean de la Croix Tabaro
2:15 am

Some of the hybrid cars already in Rwanda

Rwanda has reviewed downward or completely removed import tax on several goods, ranging from cars, shoes, to food stuffs among others, to respond to effects of COVID-19 pandemic that were exacerbated by the war in Ukraine.

In the import tax that have a lot to compare with East African Community (EAC) country members which read simultaneously their budget for fiscal year 2023/2024, Rwanda seeks to boost its economy, promote local industry, and help the citizens purchase essential goods.

During the budget speech at Rwanda Parliament, the Minister of Finance and Economic Planning Dr. Uzziel Ndagijimana precised that these are goals that were agreed upon during the meeting that convened finance ministers of the community.

In this regard, Rwanda has removed import tax for electric cars/motorcycles and hybrid cars, looking forward to protecting the environment while also alleviating the burden of fuel costs that keep rising.

The government also continued exemption of construction equipment.

Rwanda further adjusted import  taxes on food stuffs where rice will be taxed at 45% or $ 345 per ton compared to 75% in other EAC member countries.

Sugar was reviewed from 100% down to 25%, while goods from army shops which have been paying 25% were completely exempted.

Cooking oil whose costs have been skyrocketing has also been reviewed downward from 35% to 25%.

In terms of vehicles, and transports, the road construction machines were exempted, while they have been paying 10%.

Other cars from public transport or transport of goods saw their tax reviewed downward in accordance with their carrying capacity.

For example, the cars with carrying capacity comprising between 5 to 20 tons saw their tax of 25% exempted, but those that go beyond 20 tons, will pay 20% instead of existing 25%.

In public transport, the buses that carry more than 25 passengers will pay 10% instead of the existing 25%, while those that have 50 places and beyond were exempted.

Also exempted are heavy machinery and the garment industry machinery, ICT equipment, raw materials, and banking equipment used in transactions.

In the current budget however, second hand clothes and shoes saw their tax reviewed upward-Rwanda remained resilient in encouraging the citizen to buy either brand new or from the local apparel industry.

Thus, second hand clothes will be taxed $2.5 per kilogram, instead of the current $ 0.5 per kilogram while second hand shoes will be taxed $ 5 per kilogram, instead of $ 0.4 per kilogram.

Rwanda also estimates that they have acquired enough construction equipment from the local industry, and thus has reduced lenience on some of them, putting them on 35%, up from 25%.

Those include doors, windows, metal tubes, wheelbarrows. Some handbags in plastic or fabrics were also put under this braket.

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