An Analysis into the Implementation of Presumptive Tax Legislation in Zimbabwe

The first decade of the new millenium for Zimbabwe was characterized by worst economic performance since its independence in 1980 giving rise to the informal sector due to the high unemployment levels in the country. Companies have been closing down leading to reduced revenue collections from the corporate sector hence government has resorted to presumptive. The study aimed to identify the adoption of the presumptive tax legislation in Zimbabwe, to understand the current state on the implementation of the presumptive tax legislation in Zimbabwe and to obtain an understanding over whether the informal traders are knowledgable about the presumptive tax legislation and how they prefer to be taxed. It adopted the descriptive study approach as it sets out to collect, organize and summarize information about the matter that was under study, that is, presumptive tax legislation. Desk research was carried out to gather data on the presumptive tax legislation as well as literature on the subject through secondary data.The study realised that the presumptive tax legislation in Zimbabwe is mainly industry specific wher the tax is charged based on the profession or trade of the individual. There is a possibility that the presumptive tax legislation can overcharge new companies whist charging less existing  companies hence it should be factored in upon implementation. The study suggests for the method to be fair, the tax should be charged on gross receipts, so that the presumptive tax payer identifies the need to register for tax where compliance is monitored as well as enforcement.