July 9, 2019

No Excise Duty On ‘Made In Rwanda’ Vehicles

Germain Nsanzimana July 9, 2019

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Volkeswagen cars that operate “Move Ride” service. These and other brands made in Rwanda will pay no Excise Duty

A bill amending the excise duty regime presented to Parliament yesterday by Finance and Economic Planning Minister Dr Uzziel Ndagijimana will make Volkeswagen cars cheaper.

Clients buying vehicles made in Rwanda will pay no Excise Duty or otherwise called consumption tax, which is paid by the client when they are buying any item.

“For car factories that will operate in Rwanda, we have added their products on exempted goods,” said Dr Ndagijimana.

So far, only German car giant Volkswagen AG will benefit from this tax exemption. Since last year, it has been making cars at its factory in Kigali, with plans to produce 5,000 cars soon annually, and thousands more later.

By making the cars exempt from excise, it means they were relatively cheaper.

However, Dr Ndagijimana maintained levy on other types of cars, and varies depending on the size of the engine.

The new changes form part of a wide range of amendments in the bill which is also proposing huge cuts to excise on beer and wines.

For beer and wines whose ingredient will be 70% from within Rwanda, excise tax will be 30% – down from 70% rate that was paid on all alcohol.

The following goods are exempt from the excise duty:

  1. goods for charitable organizations;
  2. vehicles assembled in Rwanda;
  3.  one (1) personal vehicle of Rwandan diplomats returning from foreign diplomatic missions;
  4. one (1) vehicle of Rwandan refugees or returnees from a foreign country who fulfill exemption conditions set forth under the Customs Law;
  5.  vehicles of the following categories: minibus and bus that can carry not less than fourteen (14) persons, lorries and light duty vehicles manufactured to carry goods, refrigerating vehicles, tourist vehicles and vehicles designed for persons with disabilities;
  6. products specifically manufactured for export;
  7. products sold to duty free shops and other specific persons legally determined;

Here is outline of the new Excise Duty regime being proposed

Products    Tax rate
Fruit  or vegetable juices 5%  
Lemonade, Soda and other juices   39%)
Industrial packed water 10%
Beer whose local raw material content, excluding water is at least 70% by weight of its constituents   30% (down from 70%)
Other beers 60%;
Wine whose local content, excluding water is at least 70% by weight of its constituents    30% (down from 70%)
Other wines 70%
Brandies, liquors and whisky 70%
Cigarettes 36% of retail price of a pack of 20 rods and  130 Frw per pack  
Premium (excluding benzene)   183 Frw/liter
Gas oil   150 Frw/liter
Lubricants 37%  
Vehicles with an engine capacity of less than 1500 cc   5%
Vehicles with an engine capacity of between 1500 and 2500 cc   10%
Vehicles with an engine capacity of above 2500 cc 15%
Powdered milk 10%
Telephone communications   10%

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