The government has introduced a 3 per cent ‘tourism levy’ on accommodation facilities, including hotel rooms. Officials state that the levy aims to support investments in the tourism and hospitality sectors.
A tourism levy is a fee or tax imposed on tourists, usually as part of the cost of services or accommodation, such as hotel stays, tours, or other tourism-related expenses.
The primary purpose of this levy is to generate revenue that can be reinvested into the tourism sector or used to fund infrastructure, maintenance, and conservation efforts that benefit both tourists and the local population.
Tourism levies are commonly used by governments to support the sustainability of the tourism industry, promote local attractions, improve facilities, and fund projects that enhance the overall tourism experience.
The levy is part of tax policy reforms approved by the Cabinet on February 10.
According to Yusuf Murangwa, the Minister of Finance and Economic Planning, the new levy is fixed at 3 per cent of the hotel room rate.
“Every tourist who books a room will pay the tourism levy, which is 3% of the room’s cost. This tax is applied in different countries. For instance, if a tourist pays $100 per room, they will pay a $3 tourism levy,” he explained.
Rwanda currently has 21,232 hotel rooms, an increase from 17,078 rooms in 2020, according to the 2024 Statistical Year Book by the National Institute of Statistics of Rwanda [NISR].
The Rwanda Chamber of Tourism, the apex body for all private-sector tourism establishments in Rwanda, has announced a target to have 35,000 hotel rooms in the next five years.
As the number of visitors to Rwanda increases, investments in hotel rooms are also expected to rise, according to the Private Sector Federation [PSF].
Rwanda recorded 1.4 million visitors in 2023, a number expected to double by 2029.
Jean Guy Afrika, the CEO of the Rwanda Development Board [RDB], said the levy will contribute to the country’s efforts to generate $1.1 billion in tourism revenue by 2029, as outlined in the 2nd National Strategy for Transformation [NST2].
He said that in order to introduce the tourism levy on the cost of rooms, they also examined what other countries are doing in the region and across the continent.
He explained that the levy will be paid by the tourist who books the room: “The tourism levy is not paid by the hotel. It is not double taxation.”
Rwanda seeks to increase tourism revenues from $620 million in 2023/24 to $908 million in 2026/27 and $1.1 billion in 2028/29.
Revenues from Rwanda’s meetings, incentives, conferences, and events [MICE] industry is expected to increase from $95 million in 2023 to $156 million in 2026/27 and further to $224 million in 2028/29.
Under NST2, innovative tourism and conservation financing initiatives, such as green bonds, investments in conservation, public-private partnerships, and product diversification, are expected to elevate Rwanda into a high-end tourism market.
New and existing tourism destinations will be developed nationwide to diversify tourist attractions, with a strong focus on promoting nature-based tourism.
To further establish the country as a top global destination for MICE, the country will attract events aligned with national priorities, including high-level meetings, strategic partnerships, and sports events.
The MICE industry will be enhanced through professionalisation programmes alongside the introduction of industrial standards and certification to raise the overall quality of services offered.
According to the Rwanda Convention Bureau [RCB], Rwanda hosted 77 events in 2024 and welcomed at least 10,000 delegates in the fourth quarter alone.
Source: The New Times [Kigali]
Comments are closed.