Rwanda Revenue Authority (RRA) says it is ‘taking steps’ towards the implementation of a tax on digital services such as Airbnb and Netflix, as enforcement is expected to begin next year.
Such services are taxed under two different regimes: one for tourism accommodation services, and the other for digital products. Airbnb falls under both categories as a tourism service and as a digital platform. Netflix, on the other hand, is taxed only as a digital service, similar to platforms like Amazon.
The digital services tax was first announced in February this year, but its rollout will be for next year, as systems for collection are still being developed. On the other hand, the tourism accommodation tax, which was introduced in April, has already been in effect since July 1.
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The tourism levy, set at 3 percent of accommodation charges (exclusive of VAT), applies to all registered accommodation businesses, including hotels, lodges, apartments, motels, and Airbnb facilities.
According to RRA, compliance in the first month has been "excellent,” with the first collections reported on August 15. However, RRA pointed out that taxing Airbnb remains a challenge since the company is domiciled outside Rwanda. As such, the collection of such a tax necessitates that tools for digital tax collection are first developed.
"The good news is that starting the financial year 2026, we are starting the digital service tax. This would include e-commerce services like Airbnb, Netflix, and Amazon, among others. These will now have an obligation to pay digital service tax within the jurisdiction where the income was sourced,” said Jean-Paulin Uwitonze, Deputy Commissioner for Taxpayer Services and Communications at RRA.
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"What we are doing now is taking steps to ensure we get everything we need in place to start collecting tax,” he added.
Reflecting on the general picture of implementation of the tourism accommodation tax so far, Uwitonze said it is commendable to see how taxpayers "are actually taking up their obligations and trying to observe what is provided for in the law.”
He noted that according to the law, the tax is collected and recorded monthly. A business collects the tax during the month, for example, from July 1st to July 30th, and must then send it to the revenue authority by the 15th of the following month (in this case, August 15th).
On the issue of tax avoidance, especially since the accommodation sector worked informally in the past, Uwitonze explained that RRA works with different stakeholders who help in identifying illegal operators. He did not disclose any stakeholders.
"Those who try to dodge taxes get caught sooner or later, and we can retrieve all the unpaid taxes,” he added, emphasizing that the revenue authority works with consumers and the use of Electronic Billing Machines (EBM) in tracing taxes.