Abstract:
This study provides a theoretical analysis of the effect of tax evasion on Zimbabwe's revenue collection performance, a case of Masvingo taxpayers and Zimra officials. The study intended to examine the extent to which taxes are evaded in Masvingo, investigate the major problems hinders performance of revenue collection process and determined the strategies used by ZIMRA to combat tax evasion in Masvingo.The research used a
mixed method in this investigation. Survey design was employed. The study population consisted of 8640 taxpayers and 148 Zimra officials from Audit, Customer Care and Debt Management Sections. The sample total sample consisted of 342 tax payer respondents, and 55 Zimra officials. Data was collected through documentary analysis, questionnaires and interviews. The study adopted the Classical Linear Regression Model in data analysis. The study performed diagnostic tests such as multicollinearity, heteroscedasticity,
autocorrelation, unit root and stability tests with the main view of avoiding spurious results. Regression results showed that income tax and VAT are the most evaded tax heads and the strategies employed to combat tax evasion were not effective. The study concludes that tax evasion negatively but significantly affects tax revenue in Masvingo. The study also found that in order to overcome tax evasion Masvingo should provide more powers of access to information, opportunities from voluntary disclosure, prosecution and imprisonment of tax offenders and publication of tax offenders.
