Immigrants’ contribution to public finance in Rwanda, Chapter 6 in an OECD book on How Immigrants Contribute to Rwanda’s Economy

Most investigative efforts on migration have focused on developed countries while less is known about the economic value of immigrants in developing countries as countries of destination. This chapter investigates the role played by the immigrant population in Rwanda’s fiscal balance in 2012.

It uses a combination of administrative reports and household surveys and broadly applies the estimation approach developed by Dustmann and Frattini (2014). The difference between revenue contributions and the value of public expenditure made in favor of immigrants is estimated and compared to that of the native-born Rwandan population. The chapter starts with a brief overview of Rwanda’s performance in the fiscal year 2012/13. This is followed by the structure of taxes, investment incentives and social security, and a description of how the various components of revenue and expenditure are calculated. The final section presents the results of the net fiscal contribution by each nationality category.

The immigrant population made a positive contribution towards the government’s fiscal balance, implying that the value of their fiscal contributions outweighed their benefits from publicly provided goods and services. In comparison, revenue collections from the native-born population covered slightly over half of the value of public expenditure made in their favor in the same year.

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