An Assessment of the Effectiveness of Tax Revenue Collection: A Case Study of Zimbabwe
Keywords:
Tax Administration, Revenue Collection Effectiveness, Taxpayer SurveyAbstract
The effectiveness of tax collection has been a persistent issue of great concern in both developed and developing countries. Taxes are now an increasingly important revenue source for national budgets. It is, therefore, crucial for tax revenue authorities to carry out their mandate of raising much-needed government revenue effectively. This descriptive study aims to identify the key determinants of tax revenue collection in Zimbabwe. It assesses these in order to reveal the importance of the role that tax authorities play in increasing government revenue and to identify factors affecting tax revenue collection. Standard data-gathering procedures, such as questionnaires and in-depth interviews, were used. The results of the study reveal that tax revenue collection effectiveness is yet to be attained, and that the revenue authority faces challenges as a result of low levels of tax education amongst taxpayers, ineffective taxpayer identification methods, and poor monitoring and assessment procedures. The findings also show that the tax authority in Zimbabwe is yet to enforce a solid revenue collection methodology that will curb corruption activities and raise the morale of the workforce. The results from this study highlight the need for intensive taxpayer education, and show that the revenue authority should partner with the telecommunications industry, discover ways of motivating taxpayers, and privatize some of its departments. These recommendations could help to improve the effectiveness of tax revenue collection in Zimbabwe.
References
Aaron, H. S., & Slemrod, J. (1999, December 6). The South African tax system: A nation in microcosm. Tax Notes International, 19, 2187.
Bejaković, P. (2009). Tax evasion, state capacity and trust in transitional countries: The case of Croatia. Drustvena Istrazivanja, 18(4-5), 102-103.
Bhatnagar, S. (2000). Modernizing tax administration in Singapore. Washington D.C.: The World Bank Group.
Biber, E. (2010). Revenue administration: Taxpayer audit — Development of effective plans. Washington D.C.: International Monitory Fund.
Bird, R. M. (1989). The administrative dimension of tax reform in developing countries. In Gillis, M (Ed.), Tax reforms in developing countries (pp. 315-330). Durham, NC: Duke University Press.
Bird, R. M. (2010, October). Smart tax administration (The World Bank, Poverty Reduction and Economic Management Network, Economic Premise Series No. 36). https://documents1.worldbank.org/curated/en/281951468162555914/pdf/573980BRI0EP360Box353747B01PUBLIC1.pdf
Bird, R. M., & Casanegra de Jantscher, M. (Eds.). (1992). Improving tax administration in developing countries. Washington D.C.: The International Monetary Fund.
Campos, J. E., & Pradhan, S. (Eds.) (2007). The many faces of corruption: Tracking vulnerabilities at the sector level. Washington D.C.: The International Bank for Reconstruction and Development and The World Bank.
Das Gupta, M., & Mookherjee, D. (1998). Incentives and institutional reform in tax enforcement: An analysis of developing country experience. Delhi, India: Oxford University Press.
Dye, K. M., & Stapenhurst, R. (1998). Pillars of integrity: The importance of supreme audit institutions in curbing corruption (WBI Working Paper, 19684). Washington, D.C.: World Bank Institute, The World Bank.
Fjeldstad, O.-H., & Semboja, J. (2001). Why people pay taxes: The case of the development levy in Tanzania. World Development, 29(12), 2059-2074. https://doi.org/10.1016/S0305-750X(01)00081-X
Gale, W. G., & Samwick, A. A. (2014). Effects of income tax changes on economic growth. Washington D.C.: The Brookings Institution.
Hadler, S. C. (2000). Best practice in tax administration in Sub-Saharan Africa: A handbook for officials. Cambridge, MA: International Tax Program, Harvard Law School.
Jacobs, A., Jiminez, G., Crawford, D., Osinski, D., Murdoch, T., Hinz, S., Hodges, Y., Pulse, D., Lethbridge, C., & Kamenov, A. (2013). Detailed guidelines for improved tax administration in Latin America and the Caribbean. Washington D.C.: United States Agency for International Development.
Kariuki, E. (2013). Building blocks of a modern African tax administration. Nairobi, Kenya: African Policy Research Institute Limited.
Keen, M. (2013). The anatomy of the VAT. National Tax Journal, 66(2), 423-446. https://doi.org/10.17310/ntj.2013.2.06
Khalilzadeh-Shirazi, J., & Shah, A. (Eds.). (1991). Tax policies in developing countries: A World Bank symposium. Washington D.C.: The World Bank.
Kimutai, B. D., Mulongo, L. S., & Omboto, P. (2017). Influence of training in revenue mobilization on country socio-economic development in Kenya. International Journal of Economics, Commerce and Management, 5(7), 565-582.
Maseko, N. (2014). The impact of personal tax knowledge and compliance costs on tax compliance behaviour of SMEs in Zimbabwe. Elite Research Journal of Accounting and Business Management, 2(3), 26-37.
Musgrave, R. (2000). Public finance in a democratic society, volume III: The foundation of taxation and expenditure. Northampton, MA: Edward Elgar Publishing Limited.
Ndedzu, D., Macheka, A., Maverse Ithiel, M., & Zivengwa, T. (2013). Revenue productivity of Zimbabwe’s tax system. Asian Journal of Social Sciences & Humanities, 2(4), 144-156.
Organisation for Economic Co-operation and Development. (2006). Strengthening tax audit capabilities: General principles and approaches. Paris, France: OECD Publishing.
Ott, K. (1998). Tax administration reform in transition: The case of Croatia (Occasional Paper No. 5). Zagreb, Croatia: Institute of Public Finance.
Pasi, G. T. (2015). Revenue performance report for the first quarter of 2015. Harare, Zimbabwe: ZIMRA.
Prichard, W., Custers, A., Dom, R., Davenport, S., & Roscitt, M. (2019). Innovations in tax compliance: Conceptual framework (World Bank Policy Research Working Paper No. 9032). Washington D.C.: The World Bank Group.
Research Continental-Fonkom & the FinMark Trust (2012). FinScope MSME survey 2012 (English). http://documents.worldbank.org/curated/en/780081468137402417/Zimbabwe-FinScope-MSME-survey-2012
Research Continental-Fonkom & the FinMark Trust (2014). FinScope consumer survey Zimbabwe 2014. Harare, Zimbabwe: FinScope.
Silvani, C. A. (1992). Improving tax compliance. In R. M. Bird & M. Casanegra de Jantscher (Eds.), Improving tax administration in developing countries (pp. 274-305). Washington D.C.: International Monetary Fund.
Slemrod, J., & Bakija, J. (1996). Taxing ourselves: A citizen’s guide to the great debate over tax reform. Cambridge, MA: MIT Press.
Sommerfeld R, M. (1979). An introduction to taxation. New York, NY: Harcourt Brace Jovanovich, Inc.
Surrey, S. S. (1974). Tax administration in underdeveloped countries. In R. M. Bird & O. Oldman (Eds.), Readings on taxation in developing countries (pp. 497-527). Baltimore, MD: Johns Hopkins University Press.
Tanzi, V. (1991). Public finance in developing countries. Brookfield, VT: Edward Elgar Publishing Company.
Tanzi V., & Zee, H. H. (2000). Tax policy for emerging markets: Developing countries. National Tax Journal, 53(2), 299-322.
Vazquez J., Reid, G., & Bird, R. M. (1992). Tax administration assessment in Latin America (Latin America and the Caribbean Technical Department, Regional Studies Program, Report No. 13). Washington D.C.: The World Bank Group.
The World Bank. (2017, January 5). Modernization, taxpayer education provide good foundation for tax collection in Tanzania. https://www.worldbank.org/en/results/2017/01/05/modernization-taxpayer-education-provide-good-foundation-for-tax-collection-in-tanzania
Zimbabwe Revenue Authority. (2014). ZIMRA board chairman’s revenue performance report for the year 2013. Harare, Zimbabwe: ZIMRA.
Zimbabwe Revenue Authority. (2016). Revenue performance report for the year ended 31 December 2015. Harare, Zimbabwe: ZIMRA.
Zimbabwe Revenue Authority. (2017). 2016 annual report. Harare, Zimbabwe: ZIMRA.
Zimbabwe Revenue Authority. (2018). 2017 annual report. Harare, Zimbabwe: ZIMRA.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Simbarashe Hamudi
This work is licensed under a Creative Commons Attribution 4.0 International License.
Our open access status means that authors retain the copyright of their work. However, all papers published in JOTA are done so under a Creative Commons Attribution 4.0 International license (CC BY). This means that others can share and/or adapt your work without your permission as long as they follow certain rules, including attributing your work correctly.
You can learn more about this on our Open Access, Licensing, and Copyright Policies page.
