Rwanda publishes its sixth tax expenditure report

The Rwandan Ministry of Finance and Economic Planning (MINECOFIN) published its sixth tax expenditure report in May 2024. This report builds on the previous years’ analyses and primarily covers estimates of revenue foregone from tax reliefs offered under the Value Added Tax (VAT), Corporate Income Tax (CIT) and import duties, the main types of tax expenditure (TE) in Rwanda.
 

VAT tax expenditure is estimated at Rwf 248.6 billion, income tax expenditure at Rwf 50.5 billion, and import duties expenditure at Rwf 258.8 billion. Overall, total tax expenditure increased by 23.6% (Rwf 104.9 billion) compared to 2021/22, representing a total of 29% of tax revenues in FY 2022/23. 
 

Before 2022/23, VAT expenditure was the largest contributor. However, customs duty expenditures have now overtaken VAT as the largest share of tax expenditure. This rise is mainly attributed to increased imports of industrial inputs by investors, which are subject to reliefs, and the Stays of Application on specific products like sugar, wheat, and rice, which temporarily hold these items at lower tariff rates than those prescribed under the East African Community (EAC) Common External Tariff (CET). 
 

During the past 5 years the TaxDev team has worked with MINECOFIN and RRA staff to develop the methodology and analysis to produce the TE reports. This year more than 10 people from MINECOFIN and RRA worked together on the report – a bigger team than ever before.
 

Supervised by Abel Ntegano (MINECOFIN), Denis Mukama and Roy Gasangwa (RRA), the team consisted of Elysee Nyuzwenimana, Israel Bikorimana, Niyigena Albert, Umuhire Ingabire Grace (Ukwezi), Celestin Niyomugabo, Gilbert Tumusabe, David Ntihemuka, Jerome Mugemanyi, Albert Ndahimana, Ruth Ufitimbabazi and Francois Uwizeye.

The full report can be accessed at: Rwanda’s Tax Expenditure Report 2022/23.