Rwanda: Selected Issues
IMF Staff Country Reports, December 18, 2023
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Bibliographic details
- Published: December 18, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400261046.002
Executive summary
- Publication date: December 18, 2023
- Series: Country Report No. 2023/423
- Issue: 423
- Volume: 2023
- Pages: 51
- DOI: https://doi.org/10.5089/9798400261046.002
- Stock No: 1RWAEA2023004
- ISBN: 9798400261046
- ISSN: 1934-7685
- Summary: This Selected Issues paper revisits Rwanda’s options to create fiscal space to meet long-term development challenges. It examines strategies and options for a credible and comprehensive domestic revenue mobilization. The paper analyzes the driving factors of past reform successes and use an original dataset to highlight the benefits of implementing comprehensive tax reforms over selective reforms. The paper concludes that selective measures tend to yield protracted loss of revenue while measures implemented comprehensively lead to increases in revenue in the medium term. This stresses the need for an integrated approach to fiscal policy reform coordination to maximize long-term revenue benefits. For Rwanda, a comprehensive strategy for increasing tax revenues by adjusting rates, broadening the domestic tax base, improving tax compliance, and curbing tax evasion is the way forward. The strategy should shift higher tax burden from low-income households to higher income wealth cohorts with the view to advancing distributional fairness against growing inequality.
Key findings
- Selective tax measures tend to yield protracted loss of revenue.
- Comprehensive tax reforms lead to increases in revenue in the medium term.
- Past reform successes are driven by identifiable factors analyzed in the paper.
- The analysis uses an original dataset to compare comprehensive versus selective reforms.
Policy recommendations
- Adopt an integrated approach to fiscal policy reform coordination to maximize long-term revenue benefits.
- Implement a comprehensive strategy for increasing tax revenues, including:
- Adjusting tax rates.
- Broadening the domestic tax base.
- Improving tax compliance.
- Curbing tax evasion.
- Shift a higher tax burden from low-income households to higher income wealth cohorts to advance distributional fairness in the face of growing inequality.
Thematic scope and subjects covered
- Subject areas: Central bank policy rate, Climate finance, Environment, Financial services, International organization, Monetary policy, Natural disasters, Revenue administration, Taxes, Value-added tax
- Keywords: Africa, Central bank policy rate, climate agenda, Climate finance, financing option, Global, implementation framework, monetary policy transmission, Natural disasters, NDC financing, Sub-Saharan Africa, Value-added tax
International Monetary Fund. Rwanda: Selected Issues. IMF Staff Country Reports 2023, 423 (2023).
Content in this bundle
- Rwanda: Selected Issues; IMF Country Report No. 23/423; December 1, 2023