Smart Taxation in Zimbabwe: Digital Tools for Better Compliance and Revenue Optimization

Abstract: This article examines the transformative potential of digital taxation frameworks in Zimbabwe's informal economy. Drawing from a mixed-methods study, the research addresses critical gaps in Zimbabwe's presumptive tax system and proposes innovative digital solutions for revenue collection from the informal sector. The study employed structured questionnaires and in-depth interviews with 40 respondents, including ZIMRA officials, government representatives, and informal sector participants. Findings reveal that Zimbabwe's current presumptive tax framework contributes less than 0.5% to national revenue despite the informal economy representing 64.1% of economic activity valued at $73 billion GDP equivalent. The research validates a digital framework that integrates mobile money systems, real-time transaction monitoring, and artificial intelligence-driven compliance mechanisms. Statistical analysis demonstrates significant positive correlations between tax digitalization and revenue optimization (r=0.315, p<0.001), voluntary compliance enhancement, sustainable economic growth, and informal sector formalization. The proposed framework leverages Zimbabwe's cashless economy infrastructure, including the ZimSwitch platform and mobile payment systems, to create an end-to-end digital tax collection system. Implementation recommendations emphasize the need for robust cybersecurity measures, political commitment, and substantial digital infrastructure investment to fully realize the framework's transformative potential.