.  Purpose of the Law 59/2001 of 31/12/2011  Establishing the sources of Revenue and property of decentralized entities and governing their management

Article One :  Purpose of this Law

The purpose of this Law is to describe and establish the sources of revenue and property of decentralized entities in Rwanda and to govern their management.

In this Law (Article 2), the following terms shall have the following meanings:

  • “market value”: amount of money for which a property should be sold on the date of its valuation in the open market by a willing buyer;
  • “market value of an usufruct right”: amount of money paid to acquire such an usufruct right;
  • “improvements”: immovable structures or amenities that are not buildings but increase the actual value of a parcel of land or a building;
  • “title deed”: a written legal document confirming a person’s right to a property, which is delivered according to the law by the competent authority;
  • “assessment cycle”: a period of four (4) years that commences on January 1st of the first year after the commencement of this Law as well as each period of four (4) consecutive years thereafter;
  • “parcel of land”: a plot of land with clear boundaries which is wholly owned by one person or several persons in divisible shares;
  • “public institution”: an legal personality managed in accordance with laws governing public service, to which the State allocates funds in order for it to carry out specialized activities for public;  
  • “building”: an immovable and stable construction which protects humans and properties, animals or machineries permanently, or in the long term, from the disaster. Buildings include also houses;
  • decentralized entities”: local administrative entities with legal personality and administrative and financial autonomy;
  • “date of valuation”: the date of reference for an assessment of value conducted during an assessment cycle;
  • “owner”: a person who is registered as a holder of a property or who is deemed to be the holder thereof in accordance with Rwandan law;
  • “tax prescription period”: a period after which an administration has no right to recover tax due from the taxpayer;
  • “person”: an individual, a legal entity or an association of individuals;
  • “taxpayer”: any person who is subject to tax in accordance with this Law;
  • “fixed asset tax”: a tax levied on immovable property;
  • “ rental income tax” : a tax imposed on individuals  who earn income from rented immovable property;
  • “trading license tax” is a tax levied on profit-oriented activities;
  • “residential property”: a building exclusively intended for being occupied as a residence without any profit-oriented activity being carried out therein or in the plot of land on which it is erected;
  • “fixed asset”: a property that has a fixed location and cannot be moved elsewhere and includes parcels of land, buildings and improvements thereto.

Article 3: Income taxable year

The income taxable year starts on January 1st and ends on December 31st of the same year except for rental income tax

Article 4: Revenue and property of decentralized entities

The revenue and property of decentralized entities shall come  from the following sources:

  • taxes and fees paid in accordance with this Law;
  • funds obtained from issuance of certificates by decentralized entities and their extension;
  • profits from investment by decentralized entities and interests from their own shares and income-generating activities;
  • fines;
  • loans;
  • Government subsidies;
  • donations and bequests;
  • fees from the value of immovable property sold by auction;
  • funds obtained from rent and sale of land of decentralized entities;
  • all other fees and penalties that may be collected by decentralized entities according to any other Rwandan law.

All revenue projections of decentralized entities shall be included in their annual budget.

Article 5: Local taxes

Taxes which are assessed and collected by decentralized entities are the following:

1°       Fixed asset tax;  2°         Trading licence tax;  3°          Rental income tax.

This chapter deals in detail with Fixed Tax. F2.4 covers the other decentralised taxes.

 Fixed Asset Tax

Fixed asset tax base  Article 6

Fixed asset tax shall be levied on the following:

  • the market value of parcels of land;
  • the market value of buildings and all improvements thereto registered with the Land Registration Centre and for which the owner has obtained a title deed from the time the building is inhabited or used for other activities;
  • the value of land exploited for quarry purposes;
  • the market value of a usufruct with a title deed.

The date of valuation is January 1st of the first income taxable year in a four (4) -yearly assessment cycle and all fixed assets must be valued and, may be reassessed before the end of the duration of the relevant assessment cycle, with reference to that date.

Obligations for taxpayers 

The fixed asset tax shall be assessed and paid by the owner or deemed owner.

The local decentralised entity is not responsible in the first place for valuing the property.  The owner will obtain valuation from the purchase price if it a new acquisition – (see Article  17)  or by employing the expert assistance of a valuer. Effectively, this is Self-Assessment.

For the purposes of the application of this Law, the following persons shall be deemed to be owners:

  • the holder of a fixed asset where the title deed has not yet been registered in the name of the owner;
  • a person who occupies or deals with an asset for a period of at least two (2) years as if he/she is the owner and as long as the identity of the legally recognized owner of such asset is not known;
  • a proxy who represents an owner who lives abroad;
  • a usufructuary.

The owner of a fixed asset who lives abroad may have a proxy in Rwanda. The proxy shall have to fulfil all obligations this Law requires from the owner. Misrepresentation by a proxy is deemed to be a misrepresentation by the owner.

Tax liability shall not be terminated or deferred by the disappearance of an owner of a fixed asset, where that owner has disappeared without leaving behind a proxy or other person to manage that asset on his or her behalf. If, after all reasonable steps have been taken to locate the owner, a competent court has ruled that the owner of that fixed asset cannot be found, the asset shall be forfeited to the decentralized entity where it is located in accordance with the law relating to management of abandoned property. Usufruct

When a person has a usufruct on a parcel of land, a building or improvements thereto, the holder of such a right shall be deemed to be the owner. The tax liability for the usufructuary shall start from the date of commencement of the usufruct.

A usufruct is where a person does not own the property but has the use of it as if he/she did Co-ownership of fixed asset 

When a fixed asset is owned by more than one person, the co-owners shall appoint and authorize one of them or any other person as a proxy to represent them collectively as a group.

When co-owners have not appointed a co-owner or a proxy to represent them collectively as a group, the decentralized entity shall reserve the right to select any of them as a proxy who will then act for the group.


Every taxpayer must, not later than March 31st in the first tax year, file a tax declaration to the decentralized entity where the asset is located . Fixed asset tax declaration

Decentralized entities shall make available tax declaration forms no later than the January 31st of every year and on January 31st of the years which follow general revisions as provided for in Article 15 of this Law.

The tax declaration shall be signed personally by the taxpayer, his/her proxy or the usufructuary and thereafter transmitted to the decentralized entity where the asset is located.

Non-receipt of a fixed asset tax declaration form shall not relieve the taxpayer of his/her obligation to pay the tax.

Late submission, or incomplete or misleading tax declaration:

Apart from collecting the actual amount of the tax due, the decentralized entity shall levy a fine not exceeding 40% of the tax due where:

  • the fixed asset tax declaration form is not submitted;
  • the fixed asset tax declaration form is submitted late;
  • the fixed asset tax declaration form is substantially incomplete;
  • the fixed asset tax declaration form contains incorrect or fraudulent information with an intent to evade tax.

Review and re-assessment of tax by the decentralized entity

The tax declaration shall be reviewed by the decentralized entity within a period of six (6) months starting from April 1st of the year the tax declaration was filed. If the tax declaration was filed late, the six (6) months period shall start on the date the concerned decentralized entity receives it. The review shall be based on the nature and general state of the fixed asset, its location and its actual or zoned use.

Tax assessment notice – Art.14

The tax assessment notice shall contain at least the following details:

  • tax base calculation outline;
  • calculation of the market value of the concerned fixed asset;
  • calculation of the tax in Rwandan francs;
  • names of the owner or his/her proxy;
  • address of the owner, the proxy or the usufructuary;
  • the due date for the tax payment;
  • mode of payment;
  • consequences of late payment or non-payment; 9. reference to the taxpayer’s right to complain and appeal.

Article 15: Assessment cycles and general revision

The assessment cycle is every 4 years.  At the commencement of each cycle, a new general revision of market value shall take place in accordance with Articles 10, 11, 12, 13 and 14 of the Law 59/2011.  A new fixed asset tax declaration shall be filed by not later than March 31st of the first year of each tax assessment cycle.

The new self-assessed tax amount must be paid for four (4) consecutive years without filing a new tax declaration or assessment notice.  Appreciation and depreciation 

If, due to changes to a fixed asset, the value of that asset increases or decreases by more than twenty percent (20%) within an assessment cycle, the taxpayer shall submit a new tax declaration with all details within a period of one (1) month after the value has so changed.

Upon receipt of the tax declaration, the decentralized entity shall review the new tax declaration, and where applicable, issue a new assessment as provided for in Article 13 of this Law.

Reasons for an increase in value shall include the upgrading of a building or the adding of additional floors to a building, general renovation or extension or improvement of a building. Reasons for a decrease in value shall include the demolition of a building, in whole or in part, after a natural disaster. A global fluctuation of the market value between two general revisions shall not be a reason for a new assessment.

Article 17: Valuation of fixed asset 

It is the responsibility for the owner (or deemed owner) to value the asset or have the property valued. Undeveloped land: If the fixed asset constitutes a parcel of land that has not been developed or built upon, the market value shall constitute a per square metre value times the size of that parcel of land.  Developed property: Where the fixed asset consists of a parcel of land and a building and improvements, the aggregate value of the land, the building and improvements constitute the market value of such fixed asset.

In the first instance, unless it is patently clear that the purchase price is below the market value, the purchase price will be the valuation of the property.  The taxable value should be rounded up to the next full one thousand Rwandan francs.

Tax exemption  Article 18

The following fixed assets shall be exempted from the fixed asset tax:

  • fixed assets used exclusively for medical purposes, or caring for vulnerable groups, and those meant for educational and sporting activities, where no profit-making activity takes place;
  • fixed assets exclusively intended for research activities which are not meant for  profitmaking;
  • fixed assets belonging to the Government, Provinces, decentralized entities, as well as public institutions except where they are used for profit-making activities;
  • fixed assets used primarily for religious activities in accordance with the laws with exception of those fixed assets used for profit-making activities;
  • fixed assets used primarily for charitable activities as determined by the Minister in charge Social Affairs;
  • fixed assets belonging to foreign diplomatic missions in Rwanda if their countries do not levy tax on fixed assets of Rwanda’s Diplomatic Missions;
  • land in use for agriculture, livestock or forestry, if the taxpayer owns less than two (2) hectares. If he/she owns more than two (2) hectares, the first two (2) hectares shall be exempt and tax shall be levied only on the excess land;
  • fixed assets and usufructs used primarily for residential purposes, if the assessed value does not exceed three million (3,000,000) Rwandan francs. If the assessed value exceeds such an amount, only the excess value shall be taxed.

Article 19: Tax rate

The tax rate is fixed at a thousandth (1/1000 or 0.1%) of the taxable value per year.

The tax rate for lands exploited for quarry purposes is fixed at a thousandth (1/1000) of the taxable value per year.

Objection to a calculated value

Objections must be filed with the local entity within one (1) month after receipt of the assessment. For an objection to be considered, it must be in writing, justified, clear  and signed by the taxpayer,  his/her proxy or the usufructuary.

Within a period of two (2) months after receiving the letter of objection, the concerned decentralized entity must notify its decision. If it is satisfied that the objection was justified, the concerned decentralized entity must pay back the overpaid tax with interest in accordance with the provision of Article 23 of this Law within one (1) month after notifying the decision. If the decentralized entity does not notify its decision within two (2) months, the objection of the taxpayer shall be deemed to be founded.

Appeal before a competent court 

If the taxpayer is not satisfied with the decision of the decentralized entity, he/she can lodge an appeal with the competent court.

If the court finds that the appeal of the taxpayer is justified and the decision was unfairly imposed against him/her, the concerned decentralized entity must pay back the overpaid tax within one (1) month after the decision has been taken. Interests accrued thereon must be paid to the taxpayer in accordance with the provisions of Article 23 of this Law.

Tax payment

The tax, as assessed by the taxpayer must be paid to the decentralized entity where the fixed asset is located not later than March 31st of the tax year.

As long as there is no general revision or an assessment notice issued by the concerned decentralized entity, the same amount shall be paid annually by the taxpayer for four (4) consecutive tax years.

The self-assessed tax must be paid not later than March 31st, even if the revision of fixed asset tax or fixed asset tax declaration has not yet been concluded.

Article 23: Due date for tax payment 

The tax payment must be paid not later than March 31st of the tax year.  Additional tax resulting from a tax assessment notice of the concerned decentralized entity shall be paid within one (1) month from the day the tax assessment notice is issued to the taxpayer.

When the owner of a fixed asset, his/her proxy or usufructuary has disappeared without having appointed a proxy, tax collection documents shall be sent through the post office for a period of at least three (3) months and shall be posted in all administrative buildings within the decentralized entity where the  fixed asset is located. If the tax due is not paid within the prescribed period, the concerned decentralized entity shall apply procedures provided under this Law.

The objection or appeal against the assessed tax shall not relieve the taxpayer of his/her obligation to pay the tax assessed. When the taxpayer exercises his/her right to object or appeal, the total amount of assessed tax must be paid by the due date provided under Paragraph One of this Article. If the taxpayer’s objection is justified, the overpaid tax must be refunded within one (1) month after the decision is made. In this case, the concerned decentralized entity must pay to the taxpayer interests accruing on the overpaid tax in accordance with this Law.   

Change of ownership of fixed asset and payment of tax 

When fixed assets already exist or are purchased between January 1st to March 31st, the fixed asset tax shall be paid by the (new) owner thereof in a single instalment for the entire year.

Where the fixed assets change ownership after March 31st, the former owner must pay the tax as should have been done (as provided under the Law). When the person who sells the asset fails to meet his/her obligations as a taxpayer, fines and late interests shall be calculated and paid by him.

No transfer of ownership of fixed asset shall take place without a tax clearance certificate issued by the concerned decentralized entity.

Fines for late tax payments

A tax not paid when it is due shall bear interest. The interest rate is fixed at one point five percent (1.5 %). Interest is calculated on a monthly basis, non-compounding, counting from the first day after the tax should have been paid until the day of payment, which is included. Every month started will count for a complete month.

Apart from the interest payable, a surcharge equivalent to ten percent (10 %) of the tax due must be paid. However, such a surcharge shall not exceed an amount of one hundred thousand (100,000) Rwandan francs.

Deferral of tax payment

If, due to special circumstances the taxpayer is temporarily unable to pay the tax due, the Council of the concerned decentralized entity may, upon request by the taxpayer or his/her proxy, grant a deferral of payment for up to six (6) months without any fine. In this case, interest shall be paid as described in Article 25 of this Law.

The taxpayer must request a deferral of tax payment in writing at least one (1) month before the due date, after tax review or tax re-assessment. The Council of the decentralized entity must respond to the request of the taxpayer before the due date.

Tax payment in instalments

The taxpayer may request the concerned decentralized entity to authorize him/her to pay tax in instalments. The payment in instalments shall not exceed a period of twelve (12) months. The taxpayer must submit to the concerned decentralized entity a tax instalment payment plan which indicates an immediate payment of at least 25% of the tax due. The failure by the taxpayer to pay under the conditions of the tax instalment payment plan shall result in an immediate obligation to pay the total remaining amount of tax due.

Article 28 of Law 59/2011 forbids any one should interfere with the activities and responsibilities of the decentralized entity.  Anybody who does so alone or conspires with others to do so can be fined   an administrative fine of twenty thousand (20,000) but not exceeding one hundred thousand (100,000) Rwandan francs without prejudice to other penalties provided under criminal law.

Procedures for the enforcement of this Law

Articles 29 –   

If by the due date, the taxpayer has not yet filed a tax declaration, and paid the tax or has not applied for tax deferral, or the tax deferral was not granted, the concerned decentralized entity shall have the right to start procedures to identify and recover unpaid taxes.

Before starting the tax recovery procedures, a written warning must be sent to the owner(s) with all the details of the unpaid taxes and actions planned to enforce the law. The taxpayer shall be afforded the opportunity to pay the taxes but with interest.

If the tax is not paid within one (1) month of dispatch of the warning letter, the concerned decentralized entity has the right to start enforcement procedures.

Fixed asset tax which remains unpaid is a debt which can be claimed before competent courts. The decentralized entity where the fixed asset is located shall have the right to attach:

  • rent owed by a tenant to the taxpayer up to the amount of rent owed Article 32,
  • money owed to or held on behalf of the taxpayer by third parties – Article 33,
  • movable assets belonging to the taxpayer, – Article 35 fixed assets belonging to the taxpayer – Article 35 .

Also part of article 33- Once the official request for the payment of taxes has been sent, no money shall be used by the third parties without authorization by the concerned decentralized entity. If the third parties did not notify the substantive reason for non-payment within thirty (30) days as from the date the notification in writing was received, they are assumed fully  liable for the  debt to the concerned decentralized entity  in the amount equal to the amount of money they owe the defaulting taxpayer.

In respect of unpaid taxes, precedence shall be given to the payment of fixed asset tax debt – Article 34.  

In case of conflict of interests over this right between the Central Government and  decentralized entities or between decentralized entities themselves, such right shall be reserved to the Government entity that has first initiated proceedings against the taxpayer in respect of his/her fixed assets.  As for all other creditors of the taxpayer, the right of the Central Government and decentralized entities shall still have precedence.

Seizure and sale of movable and fixed assets

In respect of the seizure and sale of movable and fixed assets, the decentralized entities must comply with the law on civil and commercial procedures. Seized assets shall only be sold by public auction. In respect of fixed assets, a public auction must be arranged and directed by the public notary or by a competent bailiff.

The right to seize and sell the taxable fixed asset by public auction shall only be exercised after other enforcement mechanisms have been reasonably exhausted and not before a period of three (3) years from the due date of payment has lapsed.

The local decentralised entity can postpone an auction but can do this only once – Article 36. The proceeds from the public auction shall first be used to set off the tax, interests accruing thereto, surcharges and penalties owed to the concerned decentralized entity.

The remaining amount shall be returned to the taxpayer.

In the case of the taxpayer’s absence, the remaining amount shall be kept in the state treasury for a period not exceeding five (5) years. If the taxpayer has not claimed this amount within this period, the law relating to management of abandoned property shall be applicable.

Insolvency and bankruptcy

In case of insolvency or bankruptcy, the decentralized entity where the taxable asset is located has the right to start a forced sale of the concerned asset according to the specific law on public auction.

Amount of tax

Taxes on undeveloped sites are fixed by District Councils but must be within the limits determined by the law (art 17 LFD):

  • In the town of Kigali, the tax must be between 20 and 50 RwF per m²;
  • In other urban districts, the tax must be between 10 and 20 RwF per m²;
  • In trade centres, the tax must be between 1 and 10 RwF per m²;
  • In rural areas, the tax on undeveloped sites must not be more than 1000 RwF per hectare. When the area is more than twenty hectares (20ha), the tax on the area above the first 20 hectares must be between one thousand and one (1001) RwF and two thousand (2000 ) RwF per hectare.

If the sites without construction are touristic locations, the tax is increased by ten percent (10%) of the ordinary annual tax. For the purposes of calculating the tax, fractions of square metres (m²) and fractions of hectares are ignored.

In conclusion, art 28 LFD, as modified by the law of 1st October 2003, provides that the tax due must, at the latest, be declared and paid to the receiver of the taxes of the district by March 31st of the following fiscal year.

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