How tax dodging affects Rwanda

Mary Baine

 

"Taxation is a major building block for our development. In 1998 tax revenue made up 16% of our budget. It now makes up 52%."

- Mary Baine, Commissioner General of Rwanda Revenue Authority

Poor countries know that raising their own tax revenues is a vital way that they can end poverty and stand on their own two feet. Following the genocide in 1994, Rwanda underwent extensive reforms to get back on the pathway to recovery - and the way they have raised money in the country has been a real success story.

With a grant of £20 million from the UK government, The Rwandan Revenue Authority was set up in 1998. The Revenue Authority now collects that amount every four weeks - what an investment!

Government spending on water, health, and education has expanded massively, generating incredible results. From 1994 to 2006, poverty dropped from 74% of the population to 56%. Almost all children now get a primary education. Rwanda even has a National Taxpayers' Day, celebrating the positive contribution to the country that taxpayers make.

Despite this success, Rwanda still loses out to tax dodging by multinationals, with over $400,000 being dodged every year just by companies based in Europe and the USA. The government wants to stop this but there's little they can do.

Closing tax loopholes would help put a stop to tax dodging - and give Rwanda access the extra revenues they need to end poverty for good.

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