An Analysis of SMEs’ Attitudes and Practices Toward Tax Compliance in Zimbabwe

The informal sector has become the major employer in Zimbabwe, butthe sector is not contributing meaningfully to the treasury due to noncompliance on taxremittances by the operators. The research was done on 50 businesses in the retailsector in Gweru. The findings are that minimal efforts are being put in place to enforcecompliance, and corruption levels are high among the tax collection officials. Small andmedium enterprises (SMEs) evade compliance by paying bribes, keeping two sets ofrecords, relocating to new premises without notifying authorities, and temporarilyclosing businesses during compliance blitz. Penalties have been found to be the mosteffective in enforcing compliance. Publicity should be increased by authorities usingradio, television, and pamphlets, which were found to be most effective. In addition,the Zimbabwe Revenue Authority (ZIMRA) should give business people more formal taxeducation to enhance understanding of tax obligations and compliance