On June 24, 2026, the Rwandan Parliament adopted the 2026/2027 State Budget Law, which includes multiple tax proposals aimed at improving compliance and efficiency of tax collection. Among these measures are VAT-related changes, the reform of customs and import administration, and new tax measures under the Medium-Term Revenue Strategy (MTRS).

Main Revenue Measures

Some of the key measures in the 2026/27 State Budget are focused on increasing government revenue, improving tax compliance, and modernizing tax administration. One of the vital steps towards achieving these goals is reducing the VAT compliance gap by strengthening enforcement and improving monitoring systems. Therefore, Rwanda's government plans to expand the use of electronic billing machines (EBMs) among businesses to track transactions more accurately in real time.

Regarding the reform of customs and import administration, Rwanda will improve the valuation and classification of imported goods to tackle underreporting and customs fraud. Simultaneously, the country intends to gradually align its customs regime with the East African Community (EAC) Common External Tariff framework and restore tariff rates on certain imported goods in line with regional trade commitments.

Another major step is implementing measures under the MTRS. The government plans to broaden the tax base by extending VAT coverage to sectors such as ICT services, fuel, and online goods and services that may currently be under-taxed or outside the tax net. Additionally, the government is considering introducing new taxes targeting the digital economy and tourism sector, adjusting selected excise duties and income tax rates, reducing or rationalizing tax exemptions, and strengthening overall tax administration and compliance systems.

Conclusion

The Rwandan government is determined to build on recent economic growth. As noted by the Rwandan Parliament, the budget rose from RWF 6.95 trillion (approximately USD 4.74 billion) in the 2025/26 fiscal year to RWF 7.8 trillion (approximately USD 5.32 billion) in the 2026/27 fiscal year. This is an increase of 12%, or roughly USD 580 million. Notably, the government has already taken some steps by introducing new VAT rules for digital services.