The tax waiver is detailed in RRA's annual report for 2023/24, which highlights the authority's successful year, achieving its goals and fulfilling its mandate.
The authority collected a total of Frw2.639 trillion in taxes, contributing 14% to the country's GDP and 53.3% to the national budget.
In the financial year under review, RRA collected Frw570.4 billion Frw in income tax, slightly below the target of Frw582.1 billion. It also collected Frw585 billion from profit taxes, Frw792 billion from Value Added Tax (VAT), and Frw159.2 billion from import duties.
The report further reveals that, as part of efforts to alleviate the tax burden on businesses and individuals, the government waived Frw127.5 billion Frw in taxes.
Key measures included the removal of taxes on electric and hybrid vehicles, as well as their associated equipment, the exemption of construction materials under the "Manufacture and Build to Recover Program (MBRP)," and an increase in the funds set aside by RRA to settle VAT claims for traders. This fund allocation increased from 12% to 15%.
Additionally, the report outlines that the government waived Frw27.5 billion in VAT rebates for traders. Tax exemptions on rice and maize amounted to Frw38.2 billion in forgone revenue, while the waiver for construction materials totaled Frw19.8 billion.
The government also waived Frw38.3 billion in taxes on electric cars and motorcycles. In a bid to promote the use of electric vehicles and reduce emissions from traditional cars, the government extended tax relief for importers of electric vehicles and motorcycles, allowing them to benefit from zero tariffs on imports. This measure is reviewed annually.
The report also reveals that in 2023/24, the government waived Frw40.3 billion in taxes related to electric vehicles and their equipment.
During the year, 3,687 electric and hybrid vehicles were imported, leading to tax relief of Frw38.3 billion. Additionally, 8,665 electric motorcycles were imported, resulting in a tax waiver of Frw1.9 billion. The government also waived Frw0.1 billion in taxes on related products.
On the other hand, vehicles imported from abroad are subject to a 25% import duty on the customs value, including the cost of goods, insurance, and freight (CIF), for vehicles valued up to $60,000. Vehicles exceeding this value are excluded from the tax exemptions.
RRA's tax revenues have steadily increased in recent years. In 2018/19, the authority collected Frw1.423 trillion; in 2019/20, it collected Frw1.516 trillion; in 2020/21, Frw1.654 trillion; in 2021/22, Frw1.91 trillion; and in 2022/23, the total reached Frw2.333 trillion.
IGIHE
Source : https://en.igihe.com/news/article/govt-waives-frw127-5-billion-in-tax-revenue-for-2023-24
