An Analysis of the Factors Influencing Presumptive Taxation Compliance in the Zimbabwean Retail Sector

Tax noncompliance is a growing concern in both developed and developing countries across the world. It has not been easy for the revenue collection agency to tap sufficient tax revenue due to compliance challenges in the informal sector. Worryingly, limited research work focused on presumptive taxation compliance. Given this main literature gap in tax compliance discourse, this study analyzes the factors influencing presumptive taxation compliance in the Zimbabwean retail sector. With the application of correlation and regression analysis to the data collected from 69 valid questionnaires, the results revealed that taxpayers’ attitudes, tax system complexity, perception of fairness, and taxpayers’ knowledge positively influence presumptive taxation compliance. This empirical evidence contributes to a sparse, but growing body of knowledge on presumptive taxation compliance in the context of the informal sector. Moreover, this study recommends the introduction of a participatory tax system, simplification of the tax system, augmentation of tax transparency when it comes to the expenditure of tax revenue, investment in taxpayer education, spontaneous tax audits, and improvement of horizontal monitoring approach.