Impact of tax revenue on economic growth in Rwanda from 2007-2017

5.3 CONCLUSION

As conclusions , Johensen co-integration in analyzing the data collected on gross domestic product (GDP), direct tax(DT),tax on good and service(TGS) ,Tax on international trade and transaction(TITT) through secondary source namely Rwanda Revenue Authority(RRA) and National Institute of statistics of Rwanda(NISR), our result shows direct tax(DT),tax on good and service(TGS have positive impact on the gross domestic product(GDP) in Rwanda Whereas Tax on international trade and transaction(TITT) have negative impact on the gross domestic product(GDP) in Rwanda.

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5.4 RECOMMENDATIONS

This study recommends that the policymakers within government of Rwanda must improve both direct tax and tax on goods and services (domestic tax) and increase Taxes on international trade transactions (customs duties), it will harm economic growth of Rwanda therefore custom duties must be rationally reduced or abolished and free trade zones like Africa continental free trade area (AfCFTA) must create to foster increased exchange of goods and services across borders.

Government of Rwanda should ensure that taxation is properly managed in a manner that will accelerate economic growth, reduce inflation rate and generate employment in the country.

Government should ensure that tax revenue is judiciously used in the provision of basic Education, social security Schemes, Agriculture development, Transportation, Primary Health Care, adequate Power Supply, Construction of Roads and Bridges, National defense and security, among others that will help the various sectors of the economy to grow and function very well thereby enhancing the growth and development of the economy.

If economic growth and development has to be achieved in Rwanda, then government revenue from tax should also be properly managed and judiciously be expended to provide basic facilities to the taxpayers of Rwanda.

i Government should use the revenue generated from tax especially that of tax on goods and services to develop the domestic sector of the economy especially in agriculture, health, education and national security sectors

ii Government should sensitize the citizenry through awareness campaign and enlightenment on the need to pay tax and not to evade it.

iii Government to encourage and also maintain on taxes remittance to Government account via the e-payment system with will improves tax on international trade and transaction components but also supporting the cashless economy.

iv Rwanda Revenue Authority needed to implement policies that will reduce the loop holes in tax laws which tax payers capitalize on to evade tax. Like prohibiting tax

avoidance and tax evasion a punishable offence with serious sanctions imposed.

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2. Electronic resources

Rwanda Revenue Authority: www.rra.gov.rw

Ministry of finance and economic planning:www.minecofin.gov.rw National Bank of Rwanda : www.bnr.rw

Rwanda National Institute of Statistics: www.statistics.gov.rw African Tax Administration Forum: http://www.ataf.org

World bank group: http://www.worldbank.org

APPENDICES