Journal of African Economies Vol. 00, Number 0, 1–30

There are substantial differences in the spread of the Covid-19 pandemic and policy responses to it between high- and low-income countries. While evidence on the former is growing, there remain more unanswered questions on the latter. This paper addresses this gap by providing insights on the impact of the pandemic in Rwanda, based on firm-level administrative data from Value Added Tax (VAT) returns. We find that VAT sales in 2020 declined by 11.4 % compared to 2019. These losses are particularly associated with a lockdown imposed around April 2020, after which sales quickly rebounded to pre-crisis levels once restrictions were lifted. In absolute terms, the economic cost is concentrated among the largest firms. However, small firms have been most affected in proportional terms. Disaggregating our results further, we show that firms in accommodation and food, transport services, wholesale and retail trade, as well as those registered in the capital, have been particularly affected by the crisis. Overall, the decline in sales translated to a similarly large percentage loss in VAT revenue for the government.


Giulia Mascagni

Giulia Mascagni is a Research Fellow at the Institute of Development Studies and Research Director of the ICTD. Her main area of work is taxation, but she also has research interest in public finance, evaluation of public policy, and aid effectiveness. She is an economist by training, holding a PhD in Economics from the University of Sussex. Her main geographical interest lies in African countries, with a particular focus on Ethiopia and Rwanda.

Adrienne Lees

Adrienne Lees is a Doctoral Fellow at ICTD, working primarily on projects relating to tax administration and compliance, and on the DIGITAX programme. She has completed an ODI Fellowship in the Tax Policy Department at the Ministry of Finance, Planning and Economic Development in Uganda. Adrienne holds an MSc in Economics for Development from the University of Oxford and is completing her PhD in Economics at the University of Sussex.
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