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A critical review of the taxation of the informal sector in Zimbabwe
Domestic revenue mobilisation is fundamental if African countries are to fund investments in health, education, infrastructural development, economic growth, human capital development, security, and prosperity to attain the Sustainable Development Goals by 2030. Some goals focus on eradicating poverty, reducing inequalities, strengthening institutions, and providing decent work. This requires resources and investment, yet Sub-Saharan African countries continuously struggle to mobilise enough revenue to meet basic government objectives. Through a critical literature review, this paper focuses on sustainable tax revenue mobilisation in Sub-Saharan African Countries, discussing the challenges, opportunities, and prospects for possible amelioration of tax systems. Challenges identified to explain the ineffectiveness of revenue mobilisation in these countries include the presence of a significant informal sector, weak tax administration capacities, the growth in the digital economy, corruption, governance quality, and increased tax avoidance and evasion by multinational companies. Possible prospects include taxation of the digital economy, taxing the informal sector, the capacitation of tax authorities, and the broadening of tax bases.
This study investigates the Institutional factors and Personal income tax compliance in Kaduna State-Nigeria. The population consist of all 991 registered self-employed business men and women that registered with the Directorate of Poverty Alleviation and lives in Kaduna, kafanchan and Zaria cities of the State. Stratified random sampling was used to select the 285 respondents that form the sample size. Data were collected through administering of questionnaire while the techniques for data analysis are the descriptive statistics and multiple regressions. The study finds among others that good governance and taxpayers' awareness have a positive significant relationship with the level of taxpayers' compliance in the State. The study, therefore recommends that effective communication is necessary in order to publicize tax activities, mainly on compliance issues to the general public. Also, transparency and accountability should be the guiding principles in thought and action of government as the basis for good governance in the State. This can be achieved through aggressive human capital development, as this will go a long way in encouraging taxpayers to be more compliant in the state.
What drives tax compliance among informal workers, and how does compliance affect their policy preferences? Informal workers in developing countries encounter multiple taxes levied by government authorities and non-state actors. Using an original survey of approximately 800 informal workers in Lusaka, Zambia, this paper shows that compliance is tied to the governance setting where workers operate. In cooperative markets, compliance is higher where services are better and where trust in market leaders is stronger. Yet, in markets overseen by the city council, revenue collection capacity is more relevant. This suggests that the drivers of compliance can vary depending on the routes of accountability between tax payers, revenue collectors, and service providers. A vote choice experiment further reveals that regardless of market type, those who pay taxes are more likely to favour a politician interested in improving market services rather than one campaigning to improve the city's schools and health clinics. The results suggest that even within the informal sector, the process of paying taxes affects policy preferences and shapes citizens' preferences for elected leaders who espouse a platform most congruent with their own priorities.
Judgement of quality in qualitative has been a contested and controversial issue amongst researchers. Contention has always emanated from the subjective nature of qualitative studies, absence of clear guidelines in sampling as well as the lack of generalisability of findings. Numerous avenues have been suggested to improve qualitative research quality and key amongst the suggestions is the concept of saturation. It is viewed as a contemporary measure to alleviate the subjectivity in qualitative research, a yardstick for estimating sample sizes in qualitative research as well as an assurance for rigour and quality. Despite its recognition as a vital tool, it has its own fair share of controversies and contradictions. This research, through a comprehensive and evaluative literature review sought to unpack the saturation puzzle, controversies in definitions and underlying assumptions. The objective was to make a contribution to the contemporary but growing body of knowledge on the saturation conundrum. The study found out that there are various forms of saturation and with varying underlying propositions, therefore in order to meaningfully apply the concept, researchers have to appreciate the forms of saturation, link the appropriate form to their qualitative research design. It is undoubtedly important for research to define fully the form adopted, explicate the steps followed to achieve it and how it was ultimately achieved. In short, narrow the scope of saturation and contextualise it to your research.
The paper analytically examines the literature to explicate the history and development of Small and Medium Enterprises (SMEs) in Zimbabwe. The paper reviews various government policies that were initiated to promote the development and growth of the SME sector. The examination of related literature revealed that the history of SMEs stretches to the Rhodesian era. Various variables such as the HIV/AIDS pandemic, economic meltdown and retrenchments have promoted the growth of the sector. The SME sector has significantly increased in the last decade due to various players coming in to support the growth and survival of small businesses. Though various government policies have failed to achieve the desired results due to a lack of pre-consultation before the implementation of these policies and the government lack serious commitment to support the sector. We recommend that there should be pre-consultation during policy development, SME database should be created and policies should not be just a blueprint without implementation.
Most developing countries of the world currently battle with the problem of inadequate funds to meet their financial needs. In a bid to solve that problem, some have resorted to taxing the informal sector. This study examined effects of taxing the informal sector in Nigeria. To achieve that, the researchers distributed a total of 110 questionnaires to respondents within Port Harcourt metropolis and its environs. The responses were presented using descriptive statistical tools of tables and bar charts. Formulated hypotheses were tested using the Kruskal Wallis and Chi square tests. Findings revealed that taxing the informal sector would boost revenue generation and also impact positively on the economic development of developing countries. The researchers therefore recommended: effective tax monitoring and audit of the informal sector operators, enhanced capacity building of staff of the Revenue Authorities, immediate establishment of revenue courts to try offenders where necessary, reduction of multiple taxes, etc. as some of the steps to be taken to ensure compliance to tax payments by informal sector operators.
In low-income countries, citizens often pay ‘taxes’ that differ substantially from what is required by statute. These non-statutory taxes are central to financing both local public goods and maintaining informal governance institutions. This study captures the incidence of informal taxation and taxpayer perspectives on these payments. We find, first, that informal taxes are a prevalent reality within areas of weak formal statehood in Sierra Leone, with households paying an equal number of informal and formal taxes. Second, we find positive taxpayer perceptions of the fairness of informal taxes relative to formal taxes, despite informal taxes being regressive in their distribution. We explain this by the fact that taxpayers are more likely to trust the actor levying these payments and are more likely to believe that they will be used to deliver benefits to the community.