Rwanda is increasing its excise tax on mobile airtime to 8 percent from 5 according to the budget unveiled on 10 June. Over the past three years, Rwanda has maintained the lowest excise charge in the region, starting at 3 percent and later increasing to 5 percent and now 8 percent. This has been used as a reference point by those advocating lowering the excise duty in other countries in the region, which have been working on coordinating tax policies, according to Business Daily. Excise tax ranges between 5 percent and 12 percent within the East African Community countries. This is on top of VAT, which ranges from 16 percent to 18 percent. Currently the excise duty in Kenya stands at 10 percent while Uganda levies the same at 12 percent and Tanzania at 7 percent. The increase in airtime tax in Rwanda is offset by a proposal to remove VAT on mobile handsets and import duty on Sim cards to increase penetration of telecommunication services to the lower segments of the population, local paper the New Times reports. The increase in excise tax is expected to raise around RWF 2 billion for the government.
