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The design and implementation of minibus taxi presumptive taxes

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  • Godwin Dube

Abstract

This paper assesses the design of Zimbabwe’s minibus taxi presumptive taxes that were first implemented in 2005 and evaluates them in terms of administrative effectiveness, equity and economic efficiency. The implications of these factors on tax compliance are also analysed. A mixed-methods approach was used where quantitative data were complemented by qualitative interviews with taxi operators and key informants from the country’s tax authority. The results suggest that presumptive taxes were poorly designed and administered with many operators going untaxed. The ‘informal taxes’ (bribes and ‘fees’) levied by corrupt officials, ‘committees’ and touts also resulted in taxes that did not promote equity or efficiency. Despite the numerous challenges identified, the article highlights key lessons for countries that are also trying to tax minibus taxis such as the importance of negotiating with taxi associations around taxation and the encouragement of quasi-voluntary compliance through the implementation of well-researched turnover-based presumptive taxes.

Suggested Citation

  • Godwin Dube, 2018. "The design and implementation of minibus taxi presumptive taxes," The Service Industries Journal, Taylor & Francis Journals, vol. 38(11-12), pages 723-741, September.
    • Handle: RePEc:taf:servic:v:38:y:2018:i:11-12:p:723-741
    DOI: 10.1080/02642069.2018.1471138
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    Cited by:

    1. Ferrara, Giancarlo & Bucci, Valeria & Campagna, Arianna, 2023. "Audit, presumptive taxation and efficiency: An integrated approach for tax compliance analysis," Economic Systems, Elsevier, vol. 47(3).
    2. Mpofu Favourate Y Sebele, 2021. "Informal Sector Taxation and Enforcement in African Countries: How plausible and achievable are the motives behind? A Critical Literature Review," Open Economics, De Gruyter, vol. 4(1), pages 72-97, January.
    3. Neni Susilawati & Raxel Edo Bramasta & Murwendah & Arfah Habib Saragih, 2022. "Evaluating Indonesia's Presumptive Tax Policy on Accountant Professional Services," Information Management and Business Review, AMH International, vol. 13(4), pages 1-10.
    4. Ioana Alexandra Horodnic & Colin C. Williams & Adriana Manolică & Cristina Teodora Roman & Gabriela Boldureanu, 2023. "Employer perspectives on undeclared work in the service sector: impacts and policy responses," The Service Industries Journal, Taylor & Francis Journals, vol. 43(5-6), pages 358-377, April.
    5. Siahaan, Fernando & Amberger, Harald & Sureth, Caren, 2023. "Turnover-based corporate income taxation and corporate risk-taking," arqus Discussion Papers in Quantitative Tax Research 281, arqus - Arbeitskreis Quantitative Steuerlehre.
    6. ferrara, giancarlo & campagna, arianna & bucci, valeria & atella, vincenzo, 2021. "Presumptive taxation and firms’ efficiency: an integrated approach for tax compliance analysis," MPRA Paper 111516, University Library of Munich, Germany.
    7. Neni Susilawati & Syadesa Anida Herdona & Vallencia Lim & Choirunnisa Nadilla, 2022. "Transitioning MSMEs to the Normal Tax System," Journal of Economics and Behavioral Studies, AMH International, vol. 13(6), pages 55-61.

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