Rwanda’s tax system is relatively simple and straightforward, with the main taxes that must be paid on imports including Value Added Tax (VAT), Excise Tax, and Customs Duty.
Value Added Tax (VAT) is a consumption tax that is applied to the value of imported goods plus the cost of freight and insurance. The standard VAT rate in Rwanda is 18%. This tax is levied on all goods and services that are consumed in Rwanda, and it is paid by the final consumer.
Excise Tax is another consumption tax that is applied to specific goods such as alcohol and tobacco. The rates vary depending on the item. For example, the excise tax on cigarettes is 30% while the excise tax on beer is 20%.
Customs Duty is a tariff applied to imported goods and the rate varies depending on the type of goods and their origin. The customs duty rate ranges from 0% to 35% depending on the product and its origin.
To import goods into Rwanda, an importer will need to have a valid VAT registration number and a valid import permit. They will also need to submit a Bill of Lading or Airway Bill, an invoice, and other relevant documents such as a certificate of origin to clear the goods through Customs. Additionally, depending on the type of goods being imported, other permits or licenses may be required, for example, for hazardous or restricted goods.
It’s also important to note that Rwanda is a member of the East African Community (EAC) and thus, goods imported from EAC member countries are eligible for preferential tariffs, under certain conditions. For example, goods imported from EAC member countries are eligible for a 0% customs duty rate.
In addition to these taxes, some other taxes and fees may apply to imports, such as port charges and inspection fees.
To assist those who are unfamiliar with the subject in determining the amount of taxes they will pay when shipping in Rwanda, companies such as Zest logistics have created a tax estimate tool. This tool uses the information provided by the importer such as the type of goods, origin, and value of the goods, to calculate an estimate of the taxes and fees that will be due on the import. This can help importers better understand and budget for the costs associated with importing goods into Rwanda.
Overall, the tax system in Rwanda is relatively simple and straightforward, and importers can easily understand the taxes and fees that will apply to their imports. However, it is important for importers to consult with a local tax professional or the Rwanda Revenue Authority for more information on the specific taxes and fees that may apply to their imports. Also, using the tax estimate tool provided by logistics companies like Zest logistics can help the importers to have a better understanding of the taxes they have to pay.
