A new report by Unesco has advised government to allocate six per cent of the Gross Domestic Product (GDP) to the education sector so as to increase expenditure on primary school children.
The report, released yesterday, says the six per cent allocation would raise over $100 million (Rwf68.5 billion) for the education sector, enabling it to increase spending per primary school children to Rwf93,845, from the current Rwf53,430.
The report says government can achieve this by widening its ratio of tax collection against the national GDP from the current 13 per cent to 15.8 per cent
The Education For All Global, Monitoring Report (EFA GMR) is developed annually by an independent team and published by Unesco.
The report, that analyses education funding in 67 countries, concluded that improving tax systems and devoting a fifth of national budgets to education could raise an additional $153 billion for the sector in 2015.
The additional amount that would be raised is seen to be sufficient enough to cover over 50 per cent of the finance gap for achieving quality universal basic and lower secondary education.
The report notes that Rwanda, through its revenue collection and management agency, Rwanda Revenue Authority, has increased tax revenue from 10 per cent in 1998 to 13 per cent by 2011.
Rwanda falls short of the Unesco recommendation on education allocation as it currently allocates 4.8 per cent of GDP and 17.2 per cent of the national budget.
Out of the countries analysed, only seven had met the United Nations recommendations to achieve global development goals.
The report highlights that tax revenue is growing slowly as a share of GDP in poor countries, recommending that countries should aim to raise at least 20 per cent of their GDP in taxes by stopping harmful tax exemptions, fighting tax avoidance and evasion, and diversifying tax base.
Unesco further recommends donor countries and other international partners to assist governments to strengthen their tax systems and combat corporate tax avoidance. It calls upon international partners to build stronger multilateral tax regimes to tackle tax evasion and avoidance while putting domestic revenue generation at its centre.
However, reacting to the report, Kampeta Pichette Sayinzoga, the Permanent Secretary in the Ministry of Finance and Economic Planning said Rwanda’s tax revenue to Gross Domestic Product for this fiscal year was higher than the 13 per cent mentioned in the report, at 15.1 per cent, and the education sector had the second highest budget outlay after infrastructure.
She went on to point out that Rwanda’s approach to resource mobilisation does not include earmarking taxes for specific sectors.