Rwanda Revenue Authority (RRA) has called on land and building owners to do the declaration of their assets and respective property taxes earlier.

The call comes as the exercise in question edges to the deadline; December 31.

Normally, property tax is paid for immovable assets such as houses, land, and land parcels.

"We encourage taxpayers to start the declaration and payment process as early as possible to avoid any delays which may eventually lead to penalties,” said Ernest Karasira, the Deputy Commissioner for Region and Centralised tax at RRA.

According to the tax body, citizens are encouraged to go to offices of the sectors where their respective assets are located, to get details of how much tax they will pay, following new property tax rates.

The new rates were a result of a new Ministerial Order, released at the beginning of this year, setting standard rates and criteria to determine the tax rate applicable to plots of land, in accordance with the law determining the sources of revenue and property of decentralised entities.

Currently, districts heavily rely on central government funding, and the law intends to help districts generate their own revenue.

Commenting on the changes, Karasira said: "New tax rates were fixed based on the class of the city where the taxable plot of land is located, the level of development of the land where the taxable plot is located, taxable land use, as well as the level of servicing for use (if the land is already determined in the master plan and for which all necessary services were provided to allow its appropriate use by its owner).”

He went on to say that taxpayers need to comprehend the criteria and calculations for the new rates to avoid any confusion on how much they ought to pay.

Amendment of tax rates on buildings

According to RRA, rates on taxable buildings were categorized based on the market value of the building. 

The 2020 rate for residential buildings is 0.5 per cent of the value of that asset, while for commercial buildings the rate is 0.3 per cent and 0.1 per cent for others.

‘Others’ stand for buildings not classified in residential and commercial buildings. They may among others include churches or touristic buildings such as museums.

Previously, residential buildings rates were at 0.25 per cent, commercial buildings rates at 0.2 per cent, while others had the same 0.1 per cent tax rate.

RRA says that there will be a change on the next two years’ rates, whereby in 2021, residential buildings rates will be at 0.75 per cent, commercial buildings at 0.4 per cent and others will stay the same.

In 2022, says the tax collector, residential buildings rates will be at 1 per cent, commercial buildings at 0.5 per cent, while others will stay the same.

Currently, people owning one residential house are exempted from paying property tax for that house but are supposed to pay tax for the land on which the house is built.

Land with the size of two hectares or below and is used for agriculture is also exempted from paying the tax.

Other exemption applies to assets located far from basic infrastructures, which has to be confirmed by respective district councils.