Kigali, Rwanda – The Rwanda Revenue Authority (RRA) has detailed its plans to enforce the newly introduced 1.5% digital services tax on global platforms like Netflix, Amazon, and other online service providers, set to take effect in the 2026/2027 financial year.
How Will Rwanda Collect Taxes from Digital Services?
In a bold move to adapt to the digital economy, RRA will deploy the “follow the money” strategy, tracking financial transactions made by Rwandan users to foreign-based digital companies. Since many of these firms operate without a physical presence in the country, the tax body will collaborate with local banks to monitor payments made via Rwandan-issued cards.
Ronald Niwenshuti, RRA’s Commissioner General, explained that while taxes on physical goods bought online are collected at customs, digital services like streaming platforms have been harder to regulate. “Now, we’ll identify these companies, ensure they’re registered, and trace payments made by Rwandan customers,” he said.
Tax Agents: A Key Player in Enforcement
To streamline compliance, tax agents—such as telecom companies or internet service providers—may act as intermediaries between foreign firms and RRA. Angello Musinguzi, Senior Tax Manager at KPMG East Africa, suggested that these agents could withhold and remit taxes on behalf of global giants like Netflix, which lack a local presence.
Balancing Revenue Growth & Rwanda’s Digital Ambitions
While the tax aims to ensure fair contributions from the booming digital sector, experts caution that implementation will require significant technological investment. A 2021 report by RRA and the International Centre for Tax and Development (ICTD) emphasized the need to balance taxation with Rwanda’s goal of becoming a leading ICT hub in Africa.
With Netflix alone boasting over 300 million global subscribers, Rwanda’s move could set a precedent for how African nations tax the digital economy. Will other countries follow suit?
Stay tuned as Rwanda pioneers digital taxation in the region.
