The government aims to generate Rwf15 billion from the 18% valued added tax (VAT) levied on the sale of mobile phones in the 2025/26 fiscal year, according to Rwanda Revenue Authority (RRA).

This follows the reintroduction of the VAT on mobile phones in recent tax reforms approved by the Cabinet in February.

"Basing on this fiscal year that started on July 1, we are expecting about Rwf15bn from VAT on mobile phones," said Roy Gasangwa, acting Assistant Commissioner in charge of Planning, Research and Statistics Division at RRA, told The New Times.

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Since 2010, mobile phones had been exempt from VAT as part of a government policy aimed at promoting faster and more affordable digital access in the country. This exemption has improved affordability and increased digital penetration, officials say.

"When examining the penetration of mobile phones among citizens, the rate has remained steady at 74 per cent over the past three years. In fact, smartphone penetration is even lower, at less than 25%. Today, VAT exemption is not the proper solution for the penetration," said Gasangwa.

The government aims to continue collaborating with stakeholders to enhance smartphone ownership and usage, Gasagwa said.

"The government decided to reintroduce the tax on mobile phones and look for other means to cater for the remaining 26% that does not have mobile phones," he added.

Other tax reforms include the reintroduction of VAT on ICT equipment, a tourism levy, a rise on excise duty on both cigarettes and beer, and an increase in taxes on gambling.