Marvelous Tapera 
TAX compliance has become an issue, especially in developing countries like Zimbabwe where small to medium enterprises (SMEs) usually do not comply with the tax laws. Many economic players are functioning without registering with the Zimbabwe Revenue Authority (Zimra) for tax purposes. 
Poor tax compliance in Zimbabwe is mostly due to the fact that informal players and backyard industries dominate the economy.
These fall outside the normal tax regulations and thus, do not contribute taxes to government income.
Compliance enforcement strategies such as late payment penalties aren’t helping the situation either, as they simply add to the tax debt.
The government must combat tax evasion and not encourage dishonesty, as well as not deplete the tax source of revenue.
General taxpayer education, particularly in connection to the importance of tax compliance, is required in addition to educating individuals on how the system operates.
SMEs are often hesitant to pay taxes, but well-planned educational sessions could encourage voluntary compliance by informing taxpayers about how their taxes contribute to the provision of public services and help to propel the economy northward.
Education campaigns could make optimum use of the appropriate mass media, be carefully designed with the assistance of communications professionals and tailored to the needs of the target groups.
Assuming that the basic background situation is conducive to voluntary compliance that is, the tax laws are equitable, that the tax administration implements those laws fairly and uniformly and that the tax courts are impartial, there may still be room for improvement of voluntary compliance through broad education campaigns.
Taxpayer knowledge programmes in schools and colleges, devised jointly by senior tax officials and officials of the ministry of Education, can improve voluntary compliance in the coming generation by instilling in it the idea that paying taxes is a civic duty that benefits all members of society.
Similarly, lectures and seminars can be organised for groups of taxpayers with shared interests, such as small entrepreneurs, farmers, fishermen, and members of professional associations. It is then up to the taxpayers’ initiative to read the journal and complete tax returns accurately booklet containing various instructions and guides for individual taxpayers on how to complete tax returns, including tax rates tables, examples and how to calculate tax payable.
Income distribution should be fair ― high-income earners will evade more if income redistribution is unfair.
Progressive tax rates might encourage high income groups to evade rather than lower income groups because their tax rates and taxable income are high, making the tax liabilities much higher than those in the lower income group.
For example, most high-income earners in Zimbabwe are those who hold high-ranking positions.
A simplified tax system can improve tax compliance in Zimbabwe. It is one that has rules that are easy to understand, procedures to follow and processes to be undertaken by taxpayers in their bid to comply with tax laws.
Zimra should come up with a simple but sufficient tax return. Information required in the return must be at minimum level and be readily available from taxpayers’ business and personal records. Taxpayers are likely to comply with tax laws when the tax rate is lower compared to when it is high.
This is because most SMEs regard tax payable as an expense to business. Increasing tax rates will result in taxpayers evading tax more, while lowering tax rates will actually improve tax compliance.
If the likelihood and consequences of being discovered are significant, taxpayers will ensure that they compute and disclose the right amount of tax due to the tax authorities. Taxpayers will disclose anything if they believe they will be audited that year and if the probability of being detected is high.
In conclusion, the government, through Zimra and the ministry of Finance should work with tax schools, research institutes, local and international media and civil society to educate taxpayers and the general public on the importance of paying taxes and the importance of taxes to the development of the country.
Meanwhile, Matrix Tax School invites you to take part in the upcoming Conversion for Tax Preparers from July 21-23, 2022 at Kadoma Rainbow Hotel and Chengeta Safari Lodge.
Tapera is the founder of Tax Matrix (Pvt) Ltd and chief executive of Matrix Tax School. He writes in his personal capacity.
