Working and discussion papersDecember 2020Martin Evans, Susan Harkness and Heiner SalomonFamily members in Gicumbi District, Rwanda. Photo: Yagazie Emezi/Getty Images/Images of EmpowermentThis paper profiles and analyses informal taxes and transfer payments made by households in Rwanda, and considers their incidence, scale and distributional effects on household welfare levels and income distribution alongside formal, government-based taxes and transfers. The work is divided into two main parts.The first part considers definitions of informal taxes and transfers and how these can be incorporated into fiscal incidence analysis in developing countries as put forward by the Commitment to Equity. The second part uses Rwandan household survey data to estimate the effect of informal taxes and transfers alongside official social protection and taxation policies. The scale of informal transfers is found to be very large – over 95% of households give and receive them. The scale of some informal taxes is also large. Overall, the combined effects of informal taxes and transfers are regressive, compared with a flat or slightly progressive effect of formal fiscal taxes and transfers. Read the research Informal taxes and transfers in sub-Saharan Africa: a review and analysis of incidence in RwandaDocumentpdfRelated Four expert views on the future of tax for developmentTaxation and tax reform can play a key role in a country’s economic development and achieving the Sustainable Development Goals.Articles and blogs7 February 2020Reforming tax systems in the developing world: what can we learn from the past?This paper summarises key academic ideas and policy debates on taxation and development.Research reports and studies26 June 2018See more:taxcash transfersmore effective tax systemsRwandasub-Saharan Africa
