A Cabinet meeting chaired by President Paul Kagame at Village Urugwiro on Monday, February 10, approved legal instruments to implement medium-term domestic resource mobilization measures, including taxes and levies, to strengthen financing for the National Strategy for Transformation (NST2). Minister of Finance and Economic Planning, Yusuf Murangwa, explained the government's decision to adjust taxes, emphasizing their crucial role in national development. “For a country to develop, financial capacity is essential, and that comes from taxes. These are fair and realistic taxes that people can

A Cabinet meeting chaired by President Paul Kagame at Village Urugwiro on Monday, February 10, approved legal instruments to implement medium-term domestic resource mobilization measures, including taxes and levies, to strengthen financing for the National Strategy for Transformation (NST2). Minister of Finance and Economic Planning, Yusuf Murangwa, explained the government's decision to adjust taxes, emphasizing their crucial role in national development. “For a country to develop, financial capacity is essential, and that comes from taxes. These are fair and realistic taxes that people can afford,” he said. "We have increased taxes on tobacco and alcohol because implementing the Second National Strategy for Transformation requires resources. For the country to progress, tax revenue is necessary," he added. Murangwa clarified that the tax changes will be phased in over four years, until 2029, rather than taking effect immediately. "These taxes will increase progressively each year, and we will provide further explanations," he said. The government believes these adjustments will boost revenue while ensuring a fair taxation system. “Not all the taxes will be felt at once, but they will help us build a stronger and more self-reliant economy,” Murangwa noted. The primary goal, he said, is to reduce dependence on foreign aid while strengthening the national economy. The new tax reforms fall into three categories. The first involves existing taxes, where certain exemptions are being removed. For instance, VAT exemptions on electronic devices like phones and computers were initially introduced to encourage digital adoption. However, with nearly 80% of Rwandans now owning phones, the exemption is being lifted. The second category includes tax increases on products such as cigarettes and alcohol. The third introduces a digital services tax on platforms like Netflix and Amazon, which Rwandans access from abroad.

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