An assessment on taxation as a major source of government funding in Zimbabwe. Case of Zimbabwe

Author

Nhawu, Nicholas P.

Title

An assessment on taxation as a major source of government funding in Zimbabwe. Case of Zimbabwe

Abstract

The major purposes of this project was to determine whether taxation is a major source of government revenue, determine the challenges or factors affecting tax revenue collection and to provide possible solutions to the problems identified. Zimbabwe served as the study`s focal point. The key reason that motivated the desire for this topic was the need to determine the challenges or factors affecting tax revenue collection in Zimbabwe. This research applied the practicality philosophy of research which was quantitative and qualitative in nature. A survey as a descriptive research design was utilised. The study employed stratified random sampling method and the information was congregated from the primary sources using a questionnaire and interviews. The researcher used a sample size of 100 members from a total population of 120 SME`s and informal traders. SPSS version 20 was adopted to analyse the data. Also, an analysis was conducted using Pearson correction to understand the association between taxation (dependent variable) and government funding (independent variable) and the findings indicated that there is a weak positive relationship between taxation and government funding. Also, it was discovered that there exist a solid negative association between taxation and tax rare. This study revealed that SME`s and informal traders strongly felt that taxation is a major source of government revenue in Zimbabwe. The study further revealed that the challenges affecting tax collection as per taxpayers’ responses includes the form of payment, which was believed to be time consuming and cumbersome, taxpayers also had issues when filing tax returns and they were unaware of their requirements when it comes their obligations as taxpayers. Also, the taxpayer’s believed that the office of taxation did not appreciate comments on how the tax system worked.
Furthermore, other challenges affecting tax collection according to the study is the rate of taxation which was viewed to be excessive and greater than profit margins, the failure of the Government to engage taxpayers in the developments of tax policies and there was lack of political goodwill. Lastly, the study recommends that improving tax collection management, having regular taxpayer education, use of tax motivations and enacting mechanisms to address the current caused by covid can effectively solve the challenges affecting tax revenue collection.

Date

2022

Publisher

BUSE

Keywords

Taxation

Government funding

Tax revenue

Supervisor

N/A