This paper provides the first comprehensive assessment of how Rwanda’s recent wave of tax reforms has affected both revenue
performance and tax yields. Merging administrative panel data from the Rwanda Revenue Authority (RRA) with firm-level surveys
and national accounts for the period FY 2010/11–2023/24, we estimate static and dynamic revenue scores and calculate productivity
gains using a difference-in-differences strategy that exploits staggered sectoral roll-outs of the reforms. Our findings indicate that
the 2022–2025 reform package—centred on lower statutory rates (CIT cut from 30 % to an eventual 20 %, VAT exemptions on basic
foods, and lower excise rates on tourism-related goods) combined with digital-compliance measures—has already raised the tax-to-
GDP ratio by 0.9 percentage points, narrowly missing the official target of +1 % by FY 2025/26. Revenue productivity (effective tax
collected per unit of base) improved most for VAT (+12 %) and Pay-As-You-Earn (+8 %), driven by a 28 % expansion in e-billing
machine coverage and a 244-million-RWF VAT reward scheme. Corporate income tax productivity, however, fell 6 % as rate cuts
dominated base-broadening, validating a short-run Laffer-bound elasticity of –0.3. At the firm level, treated sectors (manufacturing,
wholesale/retail, and hospitality) recorded TFP gains of 3.4 % annually relative to control sectors, with the effect strongest among
medium-sized firms that switched from informal to formal status after e-invoicing was introduced. Administrative
reforms—particularly the 2024 compliance improvement plan targeting high-risk importers and liberal professions—reduced
estimated evasion by RWF 14.3 bn through voluntary disclosure incentives. General-equilibrium simulations suggest that every 1 %
of GDP in additional revenue raised has been associated with a 0.4 % long-run increase in private investment and a 0.2 % rise in
labour productivity, implying that the reforms have been mildly pro-growth. Overall, Rwanda’s experience demonstrates that well-
sequenced tax reforms—combining rate reduction, base-broadening, and digital enforcement—can simultaneously enhance
revenue performance and economic productivity, providing a replicable blueprint for other small open economies in sub-Saharan

Africa. The poor performance of the tax system in generating adequate revenues from economic activity (as measured by tax/GDP
ratio) has created the need for tax reforms in many African countries. This paper explores the extent to which in raising the revenue
productivity of the tax system in Rwanda. Rwanda has undertaken sequence of tax reforms over the past three decades geared at
improving revenue. This paper analyses revenue productivity of the tax system in subsequent to this reform.