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Rwanda to impose new levy on imports from outside East Africa

Xinhua, February 19, 2015 Adjust font size:

Rwanda expects to impose a new levy on goods imported from outside the East African Community (EAC) in order to raise funds to invest in the regional infrastructure projects.

The draft law which seeks to introduce the new charge on imported commodities is yet to be tabled in parliament after being approved by the ministerial cabinet.

According to the proposed law, all imported goods from outside EAC, except those exempted under the law, are subject to a levy of 1.5 percent on the customs value of imported goods.

EAC is the regional intergovernmental organization composing of Burundi, Kenya, Rwanda, Uganda and Tanzania.

Speaking to Xinhua on Thursday, Alexis Nzahabwanimana, Rwanda's minister in charge of transport said that the initiative is geared towards raising money needed to finance ambitious infrastructure projects.

"We want to reduce the cost of transport brought about by the lack of viable infrastructures that support the transportation of imported goods from the sea port to Rwanda and the only option is to initiate a new levy on imported goods coming from outside EAC bloc," he explained.

The regional infrastructure projects to be funded include railway, energy, ports and harbors, and information and communications technology, among others pursued under the Northern Corridor Integration Projects initiative, are expected to cost at least 100 billion U.S dollars.

"Goods from countries like China, United Arab Emirates, Europe, India and US among others will be subjected to the new charges once it's put into law by the government," Nzahabwanimana said.

Rwanda, Uganda and Kenya under the Northern Corridor integration projects have started the search for a contractor to undertake the construction of the proposed Eldoret-Kampala-Kigali pipeline for refined petroleum products.

The 1.5 percent infrastructure development levy on goods imported from outside EAC was agreed on by EAC ministers of finance during consultations last year.

Kenya and Uganda have started implementing the policy, while Burundi and Tanzania are still consulting before they start imposing the levy.

The draft law said the levy on goods imported will be collected at Customs points by Rwanda Revenue Authority in accordance with the customs legislation and deposited into a sub account of the Treasury.

Goods to be exempted under the new law would include those imported while they were made or tax exempted from within the EAC, such as fertilizers and seeds, live animals, pharmaceutical products, medical equipment, mosquito nets, industrial machinery and equipment for energy and water sectors, as well as for investment projects with investment certificates. Endi