Structural and Political Constraints to Effective Informal Sector Taxation in Zimbabwe
Keywords:
Zimra; Presumptive Tax; Economy; Street Vendors; Revenue MobilisationAbstract
Informal sector taxation in Zimbabwe faces significant structural and political challenges that undermine revenue mobilisation, despite the sector accounting for over 60% of the labour force and contributing substantially to GDP. This paper examines these obstacles, evaluates their impact on revenue collection and proposes a tailored model to enhance compliance. Guided by Fiscal Social Contract Theory, Institutional Theory and Slippery Slope Framework, the study employs a mixed secondary research design, synthesising evidence from 65 sources, including PhD thesis, peer reviewed articles and organisational reports published between 2015 and 2025.Quantative data on compliance rates, revenue contributions and informal sector size were analysed using descriptive ,correlation, regression and ANOV techniques, while qualitative insights on political interference, institutional were derived through thematic analysis. Findings include that informal sector compliance averages 42%, contributing only 12-15% of the total revenue, with non-compliance losses estimated at 30% of potential collections. Key barriers include fragmented governance, uneven enforcement, low institutional capacity, political interference and limited digital infrastructure, particularly affecting women traders. Comparative evidence from sub-Saharan Africa demonstrates that integrated institutional-political, gender-sensitive and digital interventions can improve compliance by 15-25%. Building on these insights, the paper developed the Integrated Informal Sector Tax Compliance Model (IISTCM), which emphasises regulatory simplification, capacity building, digital compliance. The study concluded that comprehensive, context-specific interventions can strengthen revenue mobilisation, formalisation and economic resilience in Zimbabwe’s informal economy, offering critical policy guidance for sustainable tax administration.
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