TOURISM LEVY TAX EXERCISES

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Tourism Levy Overview

Tourism Levy is a tax charged on accommodation services provided by hotels, lodges, guest houses, motels and similar tourism establishments.

The Tourism Levy rate commonly applied in Rwanda is 3% of the accommodation charge.

Formula:

Tourism Levy = Accommodation Revenue × 3%

Exercise 1 – Single Hotel

Kigali Star Hotel generated the following accommodation revenue during September 2025:

Description Amount (FRW)
Room Revenue 25,000,000

Required

  1. Calculate Tourism Levy payable.
  2. Explain who is responsible for collecting Tourism Levy.
  3. Explain who bears the cost of the levy.
  4. State the declaration responsibility of the hotel.

Exercise 2 – Hotel with Multiple Services

Golden Hills Hotel earned the following income during October 2025:

Description Amount (FRW)
Room Revenue 18,000,000
Restaurant Revenue 9,000,000
Conference Hall Revenue 4,000,000

Required

  1. Identify revenue subject to Tourism Levy.
  2. Calculate Tourism Levy payable.
  3. Explain why some revenues may not be included.
  4. Prepare a simple levy calculation schedule.

Exercise 3 – Lodge and Guest House

Holy K owns the following tourism businesses:

Business Accommodation Revenue (FRW)
Lodge 12,000,000
Guest House 8,000,000
Hotel 30,000,000

Required

  1. Calculate total accommodation revenue.
  2. Calculate Tourism Levy for each business.
  3. Calculate Total Tourism Levy payable.
  4. Explain the importance of Tourism Levy in national development.
  5. Explain the taxpayer obligations.

RRA Interview Questions

  1. What is Tourism Levy?
  2. Who is required to collect Tourism Levy?
  3. What is the current Tourism Levy rate?
  4. How is Tourism Levy calculated?
  5. What services are subject to Tourism Levy?
  6. How does Tourism Levy differ from VAT?
  7. When should Tourism Levy be declared?
  8. What penalties apply for late declaration?
  9. How would you teach Tourism Levy to beginners?

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