Tax laws Rwanda
Rwanda's taxation system is designed to promote economic growth, improve compliance, and broaden the tax base. Recent reforms have introduced significant changes to both personal and corporate taxation.
Personal Income Tax:
- Taxable Income: Rwandan residents are taxed on their worldwide income, while non-residents are taxed only on Rwandan-sourced income.
Corporate Income Tax:
Standard Rate: The corporate income tax rate has been reduced from 30% to 28%.
Micro and Small Enterprises:
- Micro-Enterprises: Companies with an annual turnover of less than RWF 12 million are subject to a flat tax based on their turnover.
- Small Businesses: Businesses with a turnover between RWF 12 million and RWF 20 million pay a lump sum tax at a rate of 3% of turnover.
Recent Tax Reforms:
Amendments to Income Tax Law: In September 2023, Law No. 051/2023 amended the Income Tax Law No. 027/2022, primarily reducing the standard corporate income tax rate from 30% to 28%.
New Tax Procedures Law: Gazetted on March 31, 2023, the Tax Procedures Law aligns with the Income Tax Law No. 027/2022, aiming to streamline tax administration and compliance.
Land Tax Reforms: In 2023 and 2024, land tax reforms adjusted property tax rates, reducing the land tax rate to 0–80 Rwandan francs per square meter from the previous rate of 300 francs.
Tax Administration:
- Rwanda Revenue Authority (RRA): Established in 1998, the RRA is responsible for enforcing, assessing, collecting, and accounting for various taxes in Rwanda.
Conclusion:
Rwanda's tax laws have undergone significant reforms aimed at simplifying the tax system, reducing rates, and enhancing compliance. These changes reflect the government's commitment to fostering a conducive environment for business and economic development.
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