The Chamber of Deputies on Monday, April 28, passed a bill to implement a tourism tax on accommodation, which is expected to take effect on July 1. The tax, set at 3 per cent of accommodation charges (exclusive of value-added tax), will apply to all registered accommodation businesses, including hotels, motels, lodges, apartments, and Airbnb facilities. ALSO READ: Treasury chief Kabera defends new 3 per cent tourism levy Concerns have emerged over how the government will accurately identify and tax properties listed on Airbnb, as many of these listings are residential homes. Airbnb operates as an online marketplace, connecting hosts who want to rent out their properties with guests seeking accommodation. Addressing this, Jean Paulin Uwitonze, the Deputy Commissioner for Taxpayer Services and Communications at the Rwanda Revenue Authority (RRA), explained that the initiative is part of a broader strategy to bring digital services under the tax net. ALSO READ: Rwanda introduces ‘tourism levy’ to boost investments “There is also a bill on taxing digital services, including companies like Amazon and Netflix, among others and Airbnb falls within this category as a digital platform. We’re putting mechanisms in place to access transaction data that will help us track and collect the relevant taxes,”Uwitonze said. “When a guest books a property, they pay the total amount upfront through Airbnb's platform, like how digital platforms like Netflix operate. Through these digital transactions, the necessary information can be obtained.” He added that the tax authority will use a combination of informers, digital intelligence, and physical inspections to ensure compliance. Uwitonze also emphasized that all homeowners who rent out their properties through Airbnb must now register with the RRA and begin declaring their earnings. “By law, if someone is found to have hosted through Airbnb and failed to pay the required taxes, they will be responsible for the unpaid amount and possible penalties,” he said. ALSO READ: Parliament passes bill setting tourism tax According to RRA, a key component of the tax regime involves identifying the tax point, the specific stage in the transaction where the tax is due. Whether at the point of booking, payment, or service delivery, all digital records of transactions will serve as evidence for tax enforcement. “The digital footprint remains, whether one likes it or not, and that’s how we trace unregistered Airbnb rentals operating as residential homes,” he said. Property owners who rent out spaces without declaring them as business premises could also face backdated tax charges on rental income, after the time tax was put in effect. “We are not the first country to introduce taxation on digital services. Many others have already done so, and we are simply aligning ourselves with global best practices,” he said. Key provisions of the new law that set a tourism tax include that accommodation businesses must register and remit the tax on a monthly basis. The tax should be paid within 15 days after the end of each month; and it applies to both paid and outstanding accommodation fees. This new tourism tax is part of the government’s National Strategy for Transformation (NST2), which aims to position the country as a top-tier ecotourism destination and significantly increase tourism revenues from $620 million in 2023 as a baseline to $1.1 billion by 2029. The sector raked in $647 million in 2024, with government targeting $700 million in 2025.
