Rwanda as other low income countries suffer from financial budget deficits due to various reasons including but not limited to: inaccurate estimation of future domestic revenues, structure of the economy limiting the source of revenues, etc… In 2013, the contribution of agriculture, industry and service sectors is 30.5%, 15.1% and 47.6% respectively. The capacity of the economy to generate sufficient revenues for budgeting purposes depends on how tax revenues respond to the economic growth. To evaluate this responsiveness, tax elasticity and tax buoyancy have been estimated by regressing tax revenues on GDP as a proxy of the tax base. The regression results indicated that the tax buoyancy
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