For instance, a 2012 Kia Sorento with a 3.3-liter engine, which was valued at $26,399 when imported in January, now has an estimated value of $28,838.
Similarly, a 2012 Kia Sportage with a 3.5-liter engine, previously valued at $25,139, has seen its price jump to $29,260, representing an increase of over $3,000.
This rise in car prices inevitably affects the taxes owed, as taxes are calculated based on the vehicle's current market value and its age.
To provide a clearer picture, consider a 2012 Kia Sportage that is assessed as being 12 years old when it arrives at customs in Rwanda.
While its initial value was set at $25,139, tax authorities previously valued it at $5,027, considering depreciation. Today, when the same vehicle arrives at customs, its value is calculated at Frw 8,415,408 (Rwandan Francs).
This value is then used to calculate the tax, which amounted to Frw6.2 million, bringing the car's total value to Frw14 million. With the current pricing, the car is now valued at $29,260, and its tax will be Frw 7.6 million, meaning an increase of approximately Frw 1.4 million.
This pattern is consistent across nearly all vehicles, with price increases observed in comparison to the values calculated earlier in the year. These new prices were implemented on September 3rd.
A notable example of this trend is a popular car in Rwanda, the Mercedes Benz C200 from 2014 with a 2.0-liter engine.
Earlier in the year, this vehicle was valued at $24,629, but today, its price has soared to $37,000, reflecting an increase of over $12,000.
Other vehicles have experienced similar increases. For instance, the price of a 2011 Benz C200 with a 1.8L engine and 4WD, which was previously valued at $24,464, has now risen to $32,166.
A 2003 Toyota Rav4 with a 2.0L engine saw a price increase from $18,229 to $19,113. The cost of a 2013 Kia Cadenza/K7 with a 2.0L engine jumped from $25,074 to $26,714, while the price of a 2013 Kia K5 with a 2.0L engine surged from $18,991 to $24,317.
Similarly, a 2013 Hyundai Tucson with a 2.0L engine increased from $18,802 to $22,814, and a 2013 Toyota Camry with a 2.5L engine rose from $20,535 to $24,317.
The sudden increase in car prices has sparked concern among car dealers in Rwanda, especially for those who have vehicles already in customs.
The new prices apply not only to newly imported cars but also to vehicles already awaiting clearance.
One car dealer shared their frustration, saying that the Rwanda Revenue Authority (RRA) has insisted that the new prices must be adhered to, even though they were unexpected and many dealers were unprepared.
The dealer pointed out that if someone had ordered a car with a specific budget in mind, they would now find that the taxes they anticipated paying have changed.
Another dealer shared an example, noting that they had ordered a car expecting to pay Frw 13 million in taxes, only to discover that the tax had increased to Frw 20 million.
In response to these concerns, the Rwanda Revenue Authority has clarified that the changes in car prices are normal and legal adjustments aimed at aligning prices with current exchange rates.
According to Jean Paulin Uwitonze, the Deputy Commissioner for Taxpayer Services and Communication at RRA, the fluctuations in car prices used for tax calculations are primarily driven by changes in exchange rates and increases in sea freight costs, which are factored into the calculation of customs duties.
The RRA regularly reviews vehicle prices to ensure they match those provided by manufacturers, and that taxes are calculated accurately based on the latest market values.
IGIHE
Source : https://en.igihe.com/news/article/car-prices-soar-in-rwanda
