The Rwandan government has announced an increase in gambling taxes to support national revenue and encourage responsible gaming. Starting from the 2024/2025 fiscal year, the tax rate on gross gaming revenue (GGR) will rise from 13% to 40%, while the withholding tax on winnings will increase from 15% to 25%. This policy change is part of Rwanda’s economic transformation plan, aimed at strengthening financial self-sufficiency.
Reasons for the Tax Increase
The Ministry of Finance and Economic Planning (MINECOFIN) emphasized that these tax increases align with Rwanda’s long-term economic growth strategy. The additional revenue will support Rwanda’s Second National Transformation Strategy (NST2), which focuses on improving infrastructure, enhancing education and healthcare, creating jobs, and diversifying the economy.
Higher gambling taxes are also intended to curb reckless gambling among young people. The government aims to strike a balance between economic benefits and social responsibility.
Additionally, Rwanda has imposed a 15% excise tax on imported cosmetics and beauty products, increased vehicle registration fees, and reinstated VAT on mobile phones and ICT equipment. The fuel levy will now be charged at 15% of the CIF (cost, insurance, and freight) value instead of a fixed amount.
Official Statement on Tax Changes
The Ministry of Finance and Economic Planning reaffirmed its commitment to economic stability.
In a statement, the ministry said: “As we continue to build a strong economy and improve the livelihoods of all citizens, gambling tax reforms are a key part of our medium-term strategy. These measures enhance our resilience, promote self-reliance, and enable us to achieve our development goals effectively.”
Impact on the Gambling Industry
Casinos and sports betting operators in Rwanda will face a significant tax burden, which could affect profitability. Industry experts warn that steep tax hikes may lead to reduced gambling investments, potential closure of small businesses, and concerns over job losses for more than 5,000 industry employees.
Between 2013 and 2019, Rwanda’s gambling industry generated RWF 264.3 billion (approximately $182.9 million) in total revenue, paid RWF 8.8 billion ($6.1 million) in taxes, contributed RWF 623.2 million ($431,254) to the Rwanda Social Security Board (RSSB), and supported local businesses through employee spending.
The Rwanda Development Board (RDB) has introduced a new gambling policy focused on stricter regulation, addressing gambling addiction, and combating illegal betting activities.
The government will monitor industry trends and may adjust policies to ensure increased tax revenue without stifling industry growth. Ongoing stakeholder engagement and regulatory flexibility will be crucial in balancing tax generation and sustainable industry operations.
