Building up efficient and fair tax systems – lessons from Rwanda

This project analyses administrative tax data in Rwanda to provide knowledge for better policy-making with respect to mobilizing public revenue for inclusive economic development.

The project conducts new, policy-relevant research based on the empirical analysis of administrative tax data in partnership with the Rwanda Revenue Authority (RRA), International Centre of for Tax and Development (ICTD), and University of Copenhagen (UCPH). The research outputs of the programme are intended to assist policy makers as they develop and implement policy tools to improve development prospects in their country. An important additional goal of the project is to develop institutional and individual capacity to use administrative data for ongoing economic research and policy calibration.

Potential research topics under the collaboration include analysing the impact of advisory visits and taxpayer education campaigns on tax compliance. Other planned activities include providing technical training for the revenue authority staff.  By these engagements and subsequent research outputs, the project aims to guide policy debates based on actual data while building local research capacity in the country.

This co-operation is a subcomponent of the UNU-WIDER project Building up efficient and fair taxation. In Rwanda the co-operation with RRA covers also tax-benefit microsimulation work done under the SOUTHMOD project. Both projects are part of UNU-WIDER's programme on Domestic Revenue Mobilization (DRM). The DRM programme is financed by the Norwegian development co-operation agency Norad.

Key questions
  • What are the relative merits of different types of enforcement mechanisms in increasing tax revenues?
  • How can tax education campaigns foster accurate reporting by the taxpayers?