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.
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