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PhD defence

Harmful Tax Competition in the East African Community

  • P. Habimana
Thursday 13 January 2022
Academy Building
Rapenburg 73
2311 GJ Leiden


  • Prof.dr. H. Vording
  • Prof.dr. S.C.W. Douma (UvA)


Pie Habimana’s dissertation studies harmful tax competition in the East African Community (EAC). With a particular focus on Rwanda, it mainly refers to the approaches adopted by the EU and the OECD. The objective of the study was to investigate Rwanda’s tax competition practices, in the context of other EAC countries, in order to determine whether Rwanda is within the parameters of internationally accepted practices. The study’s main orientation was not to draw a new distinction between acceptable versus unacceptable tax practices. Rather, it was to apply the criteria already developed and accepted at the international level to the particular case of Rwanda.

As part of the findings, the dissertation identifies thirteen measures as favorable tax measures. Using five benchmarks, namely lower level of taxation (gateway criterion), ring-fencing, lack of economic substance requirement, lack of transparency, and lack of exchange of information; the dissertation assesses each of the thirteen measures. From the assessment, two measures are prima facie harmful, six are not harmful, three are not harmful but contain harmful aspects, while two could not be assessed due to lack of sufficient information. Following that, the dissertation formulates proposals for building a Rwandan tax system that is free from harmful tax practices. These include the suggestions that can be implemented at the domestic level; the suggestions that can be implemented at the EAC level; the suggestions aimed at demystifying the myth of tax competition in the EAC; and a suggestion on the EAC model against harmful tax competition.

These findings were reached using a doctrinal approach consisting of an extensive study of the relevant literature and legal texts on the research topic. These were complemented by a study of OECD reports and COCG assessments filtered from the two institutions’ databases. The main materials used are: the EAC Treaty, the draft EAC Code of Conduct against harmful tax competition, the 1997 EU Code of Conduct on business taxation, the 1998 OECD Report on harmful tax competition, the COCG assessment reports, the OECD Progress reports, the Rwandan income tax law of 2018 and the investment law of 2021.

Pie’s study is the first of its kind for Rwanda. As such, it provides a foundation that can be used to further the research on harmful tax competition. In addition, it shows the possibility of applying EU and OECD standards by non- OECD and EU countries, particularly developing countries, to create tax systems that are free of harmful tax competition and to fill the gap in developing countries that do not have sufficient legal bases in that regard. However, it also shows that OECD and EU standards are not sufficient to eradicate all harmful tax practices, both in developed and developing countries.

PhD dissertations

Approximately one week after the defence, PhD dissertations by Leiden PhD students are available digitally through the Leiden Repository, that offers free access to these PhD dissertations. Please note that in some cases a dissertation may be under embargo temporarily and access to its full-text version will only be granted later.

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