Research in Brief 87

Digital merchant payments – transactions between traders, or between traders and customers using digital means of payment – can promote tax compliance by providing access to safer, quicker formal payments for consumers, and leaving a digital trail of sales data that can be accessed by tax administration. This study examines how far the potential of digital merchant payments to increase tax compliance is being realised in Rwanda, and whether fees imposed by mobile network operators on digital financial services (DFS) can hinder both DFS adoption and tax compliance. It uses original survey data from 1,100 merchants country-wide, administrative data from the Rwanda Revenue Authority (RRA), focus group discussions and in-depth interviews. Rwanda is an interesting context in which to study digital merchant payments, as these are expected to reach 80 per cent of GDP by 2024. Particularly popular are mobile money payments, performed either through the person-to-business payment option MoMo Pay or through standard personal accounts. The country’s commitment to creating a cashless economy was accelerated due to the COVID-19 pandemic.


Kelbesa Megersa

Kelbesa Megersa holds a PhD in applied economics. He has an interest in broad areas of development research, with his main areas of expertise being in development finance, taxation, and private sector development in developing countries. Kelbesa has worked as a researcher at the Institute of Development Studies since 2019. Prior to that, Kelbesa worked as a doctoral and post-doctoral researcher linked to the Belgian Policy Research Group on Financing for Development at University of Namur. Kelbesa has years of policy research and consulting experience. He has provided research-based policy support for the development ministry of Belgium; the Foreign, Commonwealth and Development Office; and previously for the Department for International Development of the UK, among others.

Ludovic Bernad

Ludovic Bernad is a Supply Chain Specialist living in Rwanda. His interests include freight transport payments via mobile money, streamlining trade, and financial payment mechanisms, with a focus on Africa.

Yves Nsengiyumva

Yves Nsengiyumva is a researcher and community engagement specialist working on socio-economic development initiatives in Rwanda. He's a management consultant and also the in-country analyst for Euromonitor International.

Benjamin Byinshi

Benjamin Byinshi is a Senior Analyst who uses the mixed method research approach in agriculture and socio-economics related projects. His current focus is tax compliance, value chains and investment methods and analysis. Surveys he’s managed include Trade survey for National AfCFTA Strategy for Rwanda, Evaluation of the Local Competitiveness Facility Fund of Agriculture value chains, and Operationalisation of the Economic Recovery Fund for Manufacturing and MFIs/SACCOs in Rwanda.

Naphtal Hakizimana

Naphtal Hakizimana is a Research and Policy Analyst at the Rwanda Revenue Authority.

Fabrizio Santoro

Fabrizio is a Research Fellow at the Institute of Development Studies, and the Research Lead for the second component of the ICTD's DIGITAX Research Programme. His main research interests relate to governance, public finance, and taxation, with a strong focus on impact evaluation methodologies and statistical analysis. He holds a PhD in Economics from the University of Sussex.
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