Taxation is essential for sustainable development; it supports the basic function of a sustainable state and sets the context for economic growth. It is also essential for responsive government.
Yet Rwanda foregoes a significant (and unknown) amount of tax year each year amounting to what are in effect hidden expenditures. Rwanda is the most generous of the EAC countries in providing tax incentives for FDI and domestic investment, foregoing about a quarter of its potential revenue each year in tax incentives from businesses alone, 14 per cent of its potential budget.
The revenue foregone would be sufficient to more than double spending on health or nearly double that on education.