in Inducing Tax Compliance in Zimbabwe
FEATURED PAPER
By Tasiyana Siavhundu
Gweru, Zimbabwe
ABSTRACT
In 2015, Zimbabwe made a milestone in implementing ‘ease of doing business’ measures, by introducing the electronic tax filing system. The study employed a content analysis methodology in assessing the effectiveness of ZIMRA’s electronic services platform in inducing tax compliance in Zimbabwe. Information was gathered from a wide range of reliable and published sources such as books, journal articles, national budget statements, ZIMRA revenue performance reports and newspapers. Evidence gathered revealed that the electronic services platform has been helpful and much instrumental in reducing taxpayer compliance costs, thereby ameliorating overall compliance. However, the study overtly shows that the electronic services platform has not been a perfect panacea and many loopholes exist. The study therefore proffered a number of recommendations which include, but not limited to system upgrade, activating the payment gateway, taxpayer education, substantial tax reforms as well as infrastructural development.
Key Words: Compliance, Compliance Costs, Electronic Services, Zimbabwe, ZIMRA
- Introduction
Despite the attractiveness of any nation’s tax system in terms of quality administration, lower tax rates and related attractions, the rate of tax compliance directly affects the quality and efficiency of revenue services. This is one of the top reasons why most tax administration organisations (Zimbabwe Revenue Authority [ZIMRA] not an exception) now preach of voluntary compliance. If total voluntary compliance was possible, tax administrators would, all things being equal, achieve maximum possible revenue. Okello (2014) notes that there is also plenty of opportunity in many countries to enhance the design and delivery of client-focused taxpayer service programs, and better engage the private sector and other stakeholders. In a bid to move in tandem with technology and at the same time cutting on taxpayers’ compliance costs, many tax authorities have embraced electronic tax filing of statutory tax returns by taxpayers. E-government is becoming increasingly more important in today’s world due to its effectiveness and applicability in various areas. Electronic tax filing is one of the E-government services that is being adopted by many developed countries today where the public has to discharge their responsibility to the government via online tax filing. Online information systems can however only remain relevant if constantly reviewed and upgraded to incorporate enhanced attributes. Given that an online system is designed for a specific audience or users, its success can only be gauged against the feedback and perspectives from users and owners. Thus, the success of E-government depends on the importance that citizens place on factors such as convenience and general usefulness of such services.
In 2015, ZIMRA made a landmark achievement in its modernisation and automation drive by introducing an online system for the convenience of taxpayers in meeting their statutory tax obligations (ZIMRA website). This paper examines the impact of ZIMRA’s electronic services on tax compliance. Tax compliance is the accuracy of a taxpayer’s filing of tax returns, reporting, and payment of taxes due. The paper investigates whether tax compliance is lower or higher when a tax return is to be filed electronically than when a return is to be filed in the traditional paper form. Tax compliance has shown to be strongly influenced by personal ethics, and research has shown that ethics are situation-specific. In Zimbabwe, the electronic services platform had been perceived differently and taxpayers have mixed remarks over its relevance and usefulness (Sifile et al, 2018). Most users, however, acknowledge the benefits of the system although they strongly suggest the need for substantial improvements to the system (Sifile et al, 2018).
- Background information
According to Muita (2011), electronic tax filing was first coined in the United States in 1986 where Internal Revenue Services (IRS) began offering tax return E-filing for tax refunds only. This has now grown to the level that currently approximately one out of every five individual taxpayers is now filing electronically. This, however, has been a result of numerous enhancements and features being added to the programme over the years. Ramayah, Ramoo and Ibrahim (2008) assert that today electronic filing has been extended to other developed countries like Australia, Canada, Italy United Kingdom, Chile, Ireland, Germany, France, the Netherlands, Finland, Sweden, Switzerland, Norway, Singapore, Brazil, Mexico, India, China, Thailand, Malaysia and Turkey. Equally, developing countries have also been embracing electronic filing of tax returns. In Africa, South Africa was the first starting in 2003, Uganda in 2009, Nigeria, Rwanda and Kenya are a few examples of African countries that have since embraced electronic tax filing. Mandola (2013) therefore concludes that other various governments in the world are also introducing electronic tax filing in order to achieve greater tax administrative and compliance efficiency.
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How to cite this paper: Siavhundu, T. (2020). The Effectiveness of ZIMRA’s Electronic-Services Platform in Inducing Tax Compliance in Zimbabwe; PM World Journal, Vol. IX, Issue V, May. Available online at https://pmworldlibrary.net/wp-content/uploads/2020/04/pmwj93-May2020-Siavhundu-effectiveness-of-zimras-e-services-platform-for-tax-compliance.pdf
About the Author
Tasiyana Siavhundu
Gweru, Zimbabwe
Tasiyana Siavhundu is a member of Project Management Zimbabwe (PMZ) with vast qualifications and experience in Project Management, Economics, Taxation as well as Investments and Portfolio Management. He is a holder of a B.Sc. Honours Degree in Economics, Master of Commerce Degree in Economics, Post-Graduate Diploma in Project Management, Executive Certificate in Investments and Portfolio Management, Advanced Certificate in Taxation and many other qualifications.
Tasiyana has worked both in the private and public sectors in Zimbabwe. He is now employed as a Revenue Officer with the Zimbabwe Revenue Authority (ZIMRA). He is very passionate about research work and has interests in the fields of Economics (particularly Public Economics), Project Management and Taxation.
Tasiyana Siavhundu can be directly contacted by email address: tsiavhundu@gmail.com
To view other works by Tasiyana Siavhundu, visit his author showcase in the PM World Library at https://pmworldlibrary.net/authors/tasiyana-siavhundu/
