Minister of Finance and Economic Planning, Yusuf Murangwa, outlined key adjustments to customs duties and tax rates when he tabled the national budget for the 2025/2026 financial year in Parliament on Thursday, June 12, 2025.
Among the main incentives, electric vehicles, hybrid cars, and electric motorbikes will continue to be exempt from customs duties to promote green mobility and reduce air pollution.
Additionally, luxury vehicles valued above $60,000 will benefit from tax incentives, while those valued at $60,000 or less will pay the standard 25% customs duty and applicable taxes.
The government is also reducing customs duties on several essential goods to ease the cost of living and support the local economy. For example, imported rice will face a 45% customs duty, down from the previous 75%. Wheat will be fully exempt from customs duties, sugar will be taxed at 25% instead of 100%, and cooking oil will attract a 25% rate, down from 35%.
Tax relief also extends to industrial and transport equipment. Road construction machinery and large textile and shoe manufacturing machines will be fully exempt from customs duties, while trucks with load capacities between five and twenty tonnes will have their customs duty reduced to 10% from 25%.
Public transport vehicles with more than 25 seats will be taxed at 10%, and those with 50 seats or more will be exempt.
To encourage digital financial transactions, electronic payment devices such as payment cards and point-of-sale machines will now be exempt from customs duties, a change from the previous 25% tax rate.
Minister Murangwa further explained that goods imported for sale in shops designated for security personnel will be fully exempt from customs duties, previously charged at 25%.
However, to protect domestic industries and support the Made in Rwanda initiative, some duties will increase. Notably, second-hand clothes will now be taxed at a fixed rate of $2.5 per kilogram, replacing the earlier 35% customs duty. Used shoes will be taxed at $5 per kilogram instead of 35%.
The total national budget for the 2025/26 fiscal year is projected at Frw 7,032.5 billion, with Frw 4,105.2 billion expected to be generated from taxes and duties.
IGIHE
