Rwanda 1.5% Digital Services Tax

Parliamentary approval 1.5% DST on digital and electronic transactions

The Rwanda Parliament has approved cabinet draft laws including a Digital Services Tax as part of a widespread set of a revenue measures known as National Strategy for Transformation. The bill now wait Presidential signing before entering into law.

The tax will be levied on platform revenues from advertising, search and subscription services irrespective of the country of residence of the provider. This aligns with global trends where governments seek to tax digital economy giants operating within their jurisdictions but do so on a non-resident basis and so lawfully avoid corporate income taxes.

There is currently global discussions via the OECD Pillar 1 DST initiative to rewrite the rules on countries taxing digital services provided by non-residents. However, the new US administration has already pulled out of the agreement last month, sparking a number of countries to rekindle or bring forward DST’s.

Rwanda’s DST will likely three categories of supplies:

• Digital market supply or digital services through a digital marketplace, refers to e-platforms, whether e- medium, e-commerce, peer-to-peer (P2P), advertising- based, agency or subscription-based that include
• downloadable digital contents, subscription-based media; software programs; electronic data management; supply of music, film, and games electronically; online sale of goods; and any online betting activity;
• search engines and automated help desk services, online tickets, e-learning platforms, audio, vision or digital media, transport hailing platforms, among others.

Africa & Middle East Digital Services Taxes (DST)