Big Tax Shift: Finance & Insurance Services Exempt from VAT, Buyers to Be Rewarded

Since 2006, Rwanda’s VAT law has provided a list of services exempt from the tax, regularly updated over time. Recently, this list was revised again to include financial and insurance services, and a ministerial order has also introduced a reward system related to VAT. These regulations from the Minister of Finance and Economic Planning appeared in the Official Gazette dated April 17, 2025.

In an exclusive interview with Rwanda Broadcasting Agency (Radio and TV), the Commissioner for Domestic Taxes at the Rwanda Revenue Authority (RRA), Ms. Batamuliza Hajara, explained the key elements of the new regulations, highlighting the services now VAT-exempt, how the VAT-based reward system works, and the obligations of both buyers and sellers under the new guidelines.

Commissioner Batamuliza stated that the updated list of exempted services has been published, encouraging all stakeholders to read it and understand which services qualify.

She said:
“Some of the services now exempt from VAT include: investment income, loan interest, dividends, bond commission fees, electronic money transfers, mobile banking services, forex trading proceeds, remittances from abroad, foreign grants and donations, freight services, services provided by the National Bank of Rwanda, and life and medical insurance.”

She also noted that there are additional services included in the new order not mentioned in the interview.

The rationale behind exempting these services is to ease the burden on consumers, lower production costs, and enhance the efficiency of financial institutions.

VAT-Based Reward

Regarding the VAT reward, Commissioner Batamuliza clarified that eligible buyers can receive a partial refund on VAT if they purchase authorized goods or services and obtain a certified EBM (Electronic Billing Machine) invoice.

She stated:
“It is very important for consumers to ask for an official EBM invoice to receive this reward. Some sellers either don’t issue invoices or issue fake ones, which denies consumers their rights. RRA calls on the public to report traders who violate this provision to help combat fraud.”

She reminded traders that they are legally required to issue an EBM receipt for every sale and warned them about the penalties set out in RRA regulations for failing to do so.

Buyers were also advised to always ask for an invoice and verify that the prices listed match what they paid. This VAT incentive is a major step in encouraging transparency and improving tax compliance.

A decision to revise Rwanda’s tax laws was made during the Cabinet meeting held on February 10, 2025. This was followed by the approval of regulations exempting financial and insurance services from VAT and establishing a consumer refund mechanism to support trade and improve buyer benefits.