Taxes and Customs Procedures
Senior 6 · Entrepreneurship
Taxes and Customs Procedures
Lesson 4 of 5
30 min
A container of hinges, handles and varnish for Mukamana's workshop left a factory in China, crossed the Indian Ocean to Dar es Salaam and is now on a lorry approaching Rusumo, where the road from Tanzania enters Rwanda. Before the goods can reach Musanze, someone must tell Rwandan customs exactly what they are, where they were made, what they cost and who owns them, and the duties and taxes must be paid or secured. That statement is the customs declaration, and it rests on a small pile of documents. (An illustrative consignment.)
Definition
Customs: the government service that controls goods entering and leaving a country, collects the duties and taxes on them and enforces the rules on prohibited and restricted goods. In Rwanda it is RRA's Customs Services Department. Customs duty: a tax charged on imported goods, usually a percentage of their customs value.
Example: duty on a container of imported hinges, paid before the goods are released.
Definition
Customs declaration: the formal statement, made in the prescribed electronic form, of the goods' description, tariff code, quantity, value, origin and customs procedure, on which duties and taxes are assessed. Customs office: a place where customs formalities are carried out: a border post, an airport or an inland office.
Example: the import declaration for Mukamana's container, lodged in the Rwanda Electronic Single Window.
Definition
Clearing agent: a company licensed by RRA's Commissioner for Customs Services to prepare declarations and clear goods for traders; goods worth more than Frw 500,000 must be declared through one (RRA Service Charter IV). HS code: the number that classifies a product in the World Customs Organization's Harmonized System; the first 6 digits are the same worldwide, and the EAC tariff adds digits to reach 8.
Example: the EAC tariff line 2710.19.51 covers a type of lubricating oil, one of RRA's "risky commodities".
Definition
Customs value: the value on which duty is charged, based on the transaction value, the price actually paid for the goods. In the EAC it is taken at the border on a CIF basis: cost of the goods (FOB) + insurance + freight to the point of entry.
| Role | How customs does it |
|---|---|
| Collects revenue | Customs duty, plus the VAT, excise duty and withholding tax due on imports |
| Protects society | Stops prohibited goods such as narcotic drugs, counterfeits and illegal arms; checks permits for restricted goods such as medicines |
| Protects local producers | Applies the EAC Common External Tariff to imports from outside the region |
| Facilitates trade | Single window, pre-clearance and fast lanes for compliant traders |
| Produces statistics | Records of imports and exports used in national trade figures |
Rwanda is a member of the East African Community (EAC) Customs Union. Its customs law is the EAC Customs Management Act, 2004, and its import duty rates come from the EAC Common External Tariff (CET). Since 1 July 2022 the CET has had four bands: 0% for raw materials and capital goods, 10% for intermediate goods, 25% for finished goods and 35% for finished goods that the region produces in quantity, with higher rates on a short list of sensitive items (EAC, 2022). Goods that originate in another EAC Partner State, proved by a certificate of origin, pay no import duty, though they still pay VAT.
RRA's list of customs offices (2026) contains about thirty offices, each with a code. They fall into four kinds:
| Kind of office | Examples from RRA's list | Typical traffic |
|---|---|---|
| Border posts | Rusumo (Tanzania); Gatuna, Kagitumba and Cyanika (Uganda); Akanyaru-Haut (Burundi); Gisenyi-Corniche and Cyangugu (DR Congo) | Lorries, small cross-border traders, travellers |
| Airport | Kigali-Aeroport | Air cargo: light, valuable or perishable goods |
| Inland offices | Gikondo; Kigali-Poste | Goods that travel under customs control to Kigali and are cleared there; parcels by post |
| Fuel depots | Gatsata and Kabuye oil depots | Petroleum products |
Goods may also be declared in another EAC Partner State for trade inside the region, and transit goods travel under customs bond to an inland office before they are cleared.
RRA's Service Charter IV lists what a customs import declaration needs: a clearing agent, the online declaration through ReSW, the invoice, the bill of lading, the packing list, a certificate of origin where it applies, and an import permit or licence where it applies. An export declaration needs a clearing agent, the export declaration, an EBM invoice, an export licence if one is required and a certificate of origin where it applies.
Worked example 1: finding the customs value
The invoice for Mukamana's container shows goods at USD 12,000 FOB Shanghai. Sea and road freight to Rusumo cost USD 1,800 and insurance USD 200. Customs converts at an exchange rate of Frw 1,450 per US dollar (an illustrative rate). Find the customs value in francs.
Step 1: CIF in dollars. US dollars.
Step 2: convert. francs.
Answer: the customs value is Frw 20,300,000. Every duty and tax in lesson 5 is computed from it, so a mistake here, or an invoice showing a false low price, changes everything that follows.
Worked example 2: who declares, and with what?
Compare two importers. (a) Mukamana's container, worth Frw 20,300,000, made in China. (b) Ingabire, a trader in Gicumbi, brings dried beans worth Frw 450,000 across the Gatuna border from Uganda.
(a) The value is above Frw 500,000, so a licensed clearing agent must lodge the declaration in ReSW, with the commercial invoice, packing list, bill of lading and any permit. The goods come from outside the EAC, so the CET applies; a certificate of origin would not remove the duty.
(b) The value is below Frw 500,000, so Ingabire may use the simplified declaration, which RRA's charter lists with a TIN, the invoice, a certificate of origin if applicable and any permit, at a fee of Frw 500 and a target of 2 hours. If she shows the beans are of EAC origin, no import duty is due.
Warning
The declaration is the importer's responsibility. RRA's guidance to importers is clear: the importer is liable for offences in the declaration even when a clearing agent made it. The risks RRA lists include undervaluation, misdescription and misclassification of goods, declaring a false origin, under-declaring quantities and using unauthorised routes. Check what your agent declares.
Practice
Sources and credits
Written by Ganzaa: the consignment case, the document diagram, the tables, the worked examples and the practice items. The consignments, the traders and the exchange rate are illustrative (2026).
