An Analysis of the Aspects Hampering Informal Sector Tax Administration: Case of the Zimbabwe Revenue Authority

Abstract

The main focus of the study was to ascertain the potential of the informal sector to provide much-needed revenue for the government. It also focused on the challenges faced in informal sector revenue taxation and possible solutions thereof. The Zimbabwe revenue authority has maintained presumptive tax for the sector and subcontracting to the city of Harare for the collection of revenue from the informal sector. Despite all this, the industry still underperformed in terms of revenue raised. The study sought to find out challenges of taxing the informal sector, the potential of the informal sector, the effectiveness of the Zimbabwe revenue authority in taxing the informal sector, and possible ways of improving the taxing of this rampant sector. The study found out that there is great potential from the informal sector, but turning it into tangible gains has been elusive due to political interference, lack of proper infrastructure, unfair application of tax laws and general mistrust of the government. The study recommended that the government ought to play an active role by making sure there is the political will to make sure that players in the informal sector contribute to the focus in line with Adam Smith’s general principles which include fairness and equity. There is a need for staffing levels to be commensurate with the workloads and also the motivation of the employees. The research also recommended the adaptation of Information Communication Technology to ensure accountability and traceability of transactions in the informal sector as they move away from a cash-based system recommendation.

Internally sourced revenue optimality and national economy development of Nigeria

“…Using regression analysis, the study found that internally generated revenue had a positive effect on infrastructural development in the 3 senatorial districts based on the responses from the selected respondents. The result is consistent with the result obtained in the study of Otekunrin et al (2020) and Adegbie et al (2023).…”

“…In the short run however, the impact of States/FCT and LGs IGR on Real GDP decreased to 0.08% and 0.03% respectively for a 1% rise in these IGRs, and Federal government IGR and total IGR showed no impact. The results were in tandem with prior studies that reported in similar significant results, the studies of Olabisi et al (2020); Otekunrin et al (2020) and Omodero et al (2018). On the contrary, some other studies reported an inverse result revealing negative effects (Etim & Daramola, 2020;Ironkwe & Ndah, 2016).…”

“…According to the combined regression analysis descriptive and inferential analysis, federally collected taxes had a favorable impact on capital development in Lagos State. The result from Olabisi et al (2020) is not different from the result obtained by Otekunrin et al (2020) whose result exhibited that federally collected taxes had a positive effect on revenue collection and tax administration in the area tested. On the contrary, Olabisi et al (2020) result is different from the result obtained by Etim and Daramola (2020) which revealed that some extraneous factors of poor corruption control, inflation challenges and lack of social protection have negative effects on impressive responses from informal taxpayers' compliance.…”

Intelligent Assessment Method of Enterprise Tax Risk Based on Deep Learning

“…Tax is one of the main sources of national fiscal revenue. Doing a good job in tax management is an effective way for the state to implement macrocontrol over enterprises [9,10]. The current situation is disturbed by many factors.…”