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An Analysis of SMEs’ Attitudes and Practices Toward Tax Compliance in Zimbabwe

Author

Listed:
  • Tonderai Nyamwanza
  • Severino Mavhiki
  • Denver Mapetere
  • Lilian Nyamwanza

Abstract

The informal sector has become the major employer in Zimbabwe, but the sector is not contributing meaningfully to the treasury due to noncompliance on tax remittances by the operators. The research was done on 50 businesses in the retail sector in Gweru. The findings are that minimal efforts are being put in place to enforce compliance, and corruption levels are high among the tax collection officials. Small and medium enterprises (SMEs) evade compliance by paying bribes, keeping two sets of records, relocating to new premises without notifying authorities, and temporarily closing businesses during compliance blitz. Penalties have been found to be the most effective in enforcing compliance. Publicity should be increased by authorities using radio, television, and pamphlets, which were found to be most effective. In addition, the Zimbabwe Revenue Authority (ZIMRA) should give business people more formal tax education to enhance understanding of tax obligations and compliance.

Suggested Citation

  • Tonderai Nyamwanza & Severino Mavhiki & Denver Mapetere & Lilian Nyamwanza, 2014. "An Analysis of SMEs’ Attitudes and Practices Toward Tax Compliance in Zimbabwe," SAGE Open, , vol. 4(3), pages 21582440145, July.
    • Handle: RePEc:sae:sagope:v:4:y:2014:i:3:p:2158244014542776
    DOI: 10.1177/2158244014542776
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    Citations

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    Cited by:

    1. Dr Jason Mwanza & Nothando Tshuma, 2023. "Mitigating Business Risk in Manufacturing SMEs: A nexus between informal and formal business risk management: A case of Bulawayo, Zimbabwe," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(1), pages 1107-1138, January.
    2. Md. Harun Ur Rashid & Afzal Ahmad & Muhammad Saleh Abdullah & Monir Ahmmed & Serajul Islam, 2022. "Doing Business and Tax Evasion: Evidence from Asian Countries," SAGE Open, , vol. 12(4), pages 21582440221, October.
    3. Neba Bhalla & Rakesh Kumar Sharma & Inderjit Kaur, 2023. "Effect of Goods and Service Tax System on Business Performance of Micro, Small and Medium Enterprises," SAGE Open, , vol. 13(2), pages 21582440231, June.

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