Prices of 4x4 vehicles have increased owing to the changes in import duties under the East African Community (EAC) Customs Union, where Rwanda scrapped a four tax regime to adopt a three tax structure.
The Sales Executive of Akagera Motors, Emmanuel Musoni said that tax changes caused a 10 percent increase in import duties on average.
“This has seen prices of some vehicles increase beyond Rwf5 million, which has affected our sales especially for Coasters used for public transport,” he explained.
Some of the affected brand includes Toyota Hiace, Toyota Grand Cabin (super long) and Toyota Coaster (minibus).
“A Toyota Coaster which cost Rwf42 million before July 1, 2009 now costs Rwf48 million,” Musoni said.
He added that a Hiace increased from Rwf16 million to Rwf19.8 million while the price of Grand Cabin increased to Rwf24 million from Rwf20 million.
The Commercial Director of Rwanda Motors, Dario Simbizi justified the increase saying that all types of vehicles (4x2 and 4x4) are charged 25 percent as import duties.
Without divulging into details, Simbizi said that prices of some vehicles took the opposite trend due to a drop in consumption tax among others such as withholding tax.
Rwanda Revenue Authority (RRA) Deputy Commissioner General, Eugene Torero recently told the Business Times in an interview that it is possible that prices of some vehicles increased owing to Rwanda’s joining of the regional Customs Union.
He however did not derail into details of how the Customs Union could have caused this hike.
Rwanda alongside Burundi joined the EAC Customs Union on 1st July, 2009 that entails the elimination of tariffs and all levies and surcharges on imports from the region.
There were 25 percent levy on finished goods, 10 percent on intermediate products and zero percent on raw materials and capital equipment.
Before implementation, finished goods entering Rwanda have been attracting 30 percent, intermediate products 15 percent, raw materials five percent and zero percent for capital goods.
It also meant that the two new EAC entrants were to apply the EAC Common External Tariff (CET).