Members of Parliament on April 1 began reviewing a draft law that introduces new levies on petrol, diesel, and motor vehicles to fund road maintenance and establish strategic petroleum reserves. The bill, which contains amendments to a 2015 law establishing a levy on petrol and gas oil for road maintenance, seeks to fix a growing gap in funding for the Road Maintenance Fund. ALSO READ: Minister explains why Rwanda still needs petroleum products despite EV adoption If the bill is passed, a 15 per cent levy will be imposed on the value of petrol and gas oil, including insurance and freight costs. Vehicle owners will be required to pay an annual levy based on their vehicle category. The fee structure is as follows: cars and Jeeps will pay Rwf50,000, pick-ups, microbuses, minibuses, and buses will pay Rwf100,000, trucks and half-trailers will pay Rwf120,000, while trailers will pay Rwf150,000. ALSO READ: Why luxury tourist vehicles are tax-exempt in Rwanda Vehicles owned by the government, embassies, and international organizations with agreements with Rwanda, will be exempt from the levy. In addition to road maintenance, the draft law proposes a separate levy aimed at strengthening Rwanda’s fuel storage capacity. A charge of Rwf50 per liter of petrol or diesel will be collected at customs points and deposited into the public treasury. ALSO READ: Rwanda extends import tax exemption for electric vehicles The Rwanda Revenue Authority (RRA) will oversee levy collection and the fuel levy will be collected at customs points in accordance with customs legislation, while vehicle owners must declare and pay their respective fees to the tax administration by December 31 each year. RRA Commissioner General Ronald Niwenshuti assured that to prevent last-minute declarations an online tax payment system will be operational starting in July every year in order to streamline the process and enhance compliance. The draft law also suggests that revenue collected will be deposited into a sub-account within the public treasury’s single account. ALSO READ: Rwanda reintroduces VAT on hybrid vehicles to spur e-mobility MP Jean-Claude Mazimpaka emphasized the need for a gradual transition to ensure easy adaptation. “The levy on petrol, gas oil, and motor vehicles for road maintenance should be implemented progressively, so that people get used to it over one or two years to make the transition smooth,” Mazimpaka said. According to Rwanda Revenue Authority data, as of 2023, the country had more than 330,000 registered motor vehicles. ALSO READ: Number of registered vehicles up by nearly 20% in two years When will the bill take effect? The parliamentary committee overseeing the draft law review estimates that the legislative process will take approximately eight months before enactment. This timeframe allows for further consultations and refinements to align the laws with Rwanda’s broader economic policies. Explaining the legislative process, Maurice Kabandana, Director of Outreach Communication at the Parliament, noted that once a draft law is approved by the Cabinet, it is presented to the parliamentary plenary session. “After an initial evaluation, it is forwarded to the standing committee for refinement in collaboration with the relevant ministry. Once finalized, it returns to the plenary for voting before being sent to the Presidency for signature and eventual [publication in the Official Gazette, upon which it takes effects],” he added.
