Rwanda plans to raise taxes on beer and tobacco over the next five years to fund national development projects. This initiative, led by President Paul Kagame, aims to reduce alcohol and tobacco use while supporting economic growth. The gradual increases in excise taxes will also improve public health outcomes in the country, according to government officials.
Rwanda has decided to implement increased taxes on beer and tobacco over the next five years, a resolution reached during a cabinet meeting presided over by President Paul Kagame on February 10. According to government officials, the additional revenue generated will be allocated towards funding national development initiatives, particularly the Second National Strategy for Transformation.
Minister of Finance and Economic Planning, Yusuf Murangwa, stated that these tax increases are essential for supporting the nation’s growth and financing vital projects. The new taxation measures will be instituted incrementally on an annual basis over the five-year period. Furthermore, this initiative aims to diminish alcohol and tobacco consumption due to their associated health risks.
Public health advocates have long urged for elevated taxes on such products as a strategy to combat related diseases. Currently, Rwanda imposes substantial taxes on tobacco, including a 36 percent levy on the retail price of each cigarette pack, alongside a fixed fee per pack.
Historically, the excise tax on cigarettes has significantly increased, from 60 percent in 2001 to a staggering 150 percent since 2009. As of 2023, Rwanda reportedly has the highest cigarette tax in the region, with taxes constituting 50 percent of the total cost of a pack. The government asserts that these tax hikes will enhance economic performance while concurrently elevating public health standards.
In conclusion, Rwanda’s strategy to raise taxes on beer and tobacco products aims to generate funding for national development projects while also promoting public health. The incremental tax increases are expected to reduce consumption of harmful substances and support the country’s growth initiatives. This multifaceted approach reflects the government’s commitment to both economic enhancement and health improvement for its citizens.
Original Source: globalsouthworld.com
