The Ministry of Finance in Rwanda has moved to significantly raise taxes on the country’s gambling sector.
Minister of Finance and Economic Planning Yusuf Murangwa revealed during a press conference that GGR tax would be elevated from 13% to 40%.
Furthermore, adding the woes of regulated operators in the country, withholding tax on winnings will grow from 15% to 25%.
A statement from the country’s Minister of Finance and Economic planning said: “As we continue to build a robust economy and transform the livelihoods of all citizens, the reform of the gambling tax regime is a pivotal part of our medium-term strategy.
“These measures not only strengthen our resilience, but also promote self reliance, allowing us to meet our development goals effectively.
“In these challenging times, we recognise the importance of collaboration with our taxpayers. Our commitment to a prosperous future for all Rwandans remains steadfast, and we will work diligently to ensure that these reforms benefit our society as a whole.”
The changes come as part of wider governmental hikes when it comes to tax and VAT, with mobile phone usage also feeling the impact of a tighter economic framework.
Mobiles had previously been exempt from tax in a bid to increase their usage, however the Minister of Finance, Murangwa, underlined that 80% of Rwandans now utilise mobile phones.
The Minister of Finance has also significantly spiked taxes on overseas products being utilised in the country, such as Netflix and Amazon, as the government cited that it was seeking to “drive economic growth and strengthen domestic resource mobilization.”
The widespread increase in taxes comes at a time when the Rwandan economy is in a period of volatility as relations with the West come under scrutiny.
Pressure has elevated on Rwanda after its reported backing of M23 rebels in DR Congo, with the rebel forces most recently taking control of the second-biggest city in DR Congo, Bukavu.
British foreign minister David Lammy stated to parliament at the end of January that “all of the $1bn Rwanda receives in global aid every year, including around £32m($39.80m) of bilateral UK assistance is under threat’ as a result of the country’s attacks on neighbouring DR Congo.
Lammy stated: “We in this House are clear that we cannot have countries challenging the territorial integrity of other countries. Just as we will not tolerate it in the continent of Europe, we cannot tolerate it wherever in the world it happens.”
It’s a major moment within Africa as European and UN countries have issued stark warning of the potential consequences the continued invasion could have on peace in the region.
At an emergency meeting of the Geneva-based Human Rights Council just last week, UN High Commissioner for Human Rights Volker Turk called for peace, however warned “the worst could be yet to come” in the region.
He stated: “If nothing is done, the worst may be yet to come, for the people of the eastern DRC, but also beyond the country’s borders,” Turk warned. “All those with influence must act urgently to put an end to this tragic situation.”
Since the increased scrutiny from the West towards Rwanda as a result of the backing of M23 rebels in the DR Congo, Rwanda has seemingly pursued autarky amidst threats of withdrawal of funding.
For operators looking to enter the African market, it underlines the importance of having a strong local knowledge and understanding of the political landscape within the market.
Previously speaking to iGaming Expert, Tekkorp’s Conor O’Donovan emphasised the following advice to operators seeking to expand into Africa: “It’s important to be well aware that there are 54 countries in Africa all presenting a very different scenario.
“Some of them are more established than others, with some still governed by a Ministry of Finance, with different levels of ease when it comes to doing business.
“If you’re going to enter organically, you need to do a deep dive on the most suitable territories. Operators need to ensure they aren’t too risk exposed if they’re dipping their toes in the African waters.”
