Thursday, 22 October 2015

Political economy in the Great Lakes region

Burundi, the DRC, and Rwanda all have long-serving presidents, and much political debate in the countries relates to their hold on power and their struggles to retain their positions.  Conventional economic debates on taxation and spending attract relatively less attention than in Western countries.  The pressure put on the free media limits critical comparison of economic policies across different political parties.

One frequent argument in conventional political economy is over the level of taxation in the economy.  The maximum rates of personal income taxation in each Great Lakes country are reported here (I haven't independently verified them).  They are 35 percent in Burundi, 30 percent in the DRC, and 30 in Rwanda.  The maximum rates of corporation tax are 35 percent in Burundi, 40 percent in the DRC, and 30 percent in Rwanda.

The taxation rates are not so different across the region.  Rwanda has the lowest maximum taxation, with Burundi and the DRC having higher maximum rates.  None are extreme by international standards.  There's a debate to be had about the optimal rates of taxation, in a discussion of conventional political economy.

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