Determinants of Tax Non-Compliance among Small and Medium Enterprises in Zimbabwe

Small and medium-scale enterprises (SMEs) are recognized global for being the backbone of the economy through; economic advancement; innovation, wealth generation and furthering growth. SMEs have a high tax non compliance rate which hinders the development they bring to many economies. This paper aims to establish the major determinants of tax non-compliance among SMEs in the Zimbabwean economy. The survey research design was used and the SMEs operating in the Bulawayo provincewere considered as the sample of the study. The stratified random sampling technique was adopted in eliciting information and questionnaires were administered in the collection of data from the respondents. 187 questionnaires were issued out and 150 were returned. Regression analysis was used to establish the relationship that exists between tax non-compliance and the predictive variables, using SPSS ver. 22. The study revealed that poor follow-up strategy and lack of a tax audit, high tax rates, financial constraints, abuse of public funds by authorities and tax education as the major determinants. SME operators should apply modern business survival strategies so as to counter financial constraints. ZIMRA should maintain a database for SMEs for tax audit purposes; intensify follow-up strategies, increase tax audits and increase tax support services to SMEs. The government should consider reducing tax rates (which are perceived to be too high) as they promote tax evasion and failure among SMEs

The Current Zimbabwean Liquidity Crisis: A Review of its Precipitates

The liquidity crisis has beleaguered banks and has been bedeviling companies since 2009, after the introduction of the multi-currency system which has affected the Zimbabwean economic development. This research paper aims at investigating the causes of the liquidity crisis faced in the Zimbabwean economy. The study used survey design and researcher administered questionnaires in collecting data from the respondents located in Harare, Bulawayo, Gweru and Masvingo. Out of the 200 questionnaires issued, 150 were successfully completed and returned resulting in a response rate of 75%. The study also used secondary data obtained from government agencies on export and import performance. SPSS AMOS was used to test the hypothesis raised and generate a path model determining the size and strength of the direct and indirect influence between the predictor variables and the downstream variable. The study identifies the following antecedents of liquidity crisis; public and investor confidence, country risk, and externalization of funds, illicit financial flows, and net export performance as significant drivers that have an effect on the current liquidity crisis. The results showed that the absence of the lender of last resort role by the central bank has no significant contribution to the liquidity crisis currently obtaining. It is recommended that the government focuses on the aforementioned antecedents in order to address the liquidity crisis

Detecting probable manipulation of financial statements : evidence from a selected Zimbabwe Stock Exchange-listed bank

PURPOSE: The study used the Beneish M Score to discover probable financial statement manipulation by a selected Zimbabwe Stock Exchange-listed bank.RESEARCH METHODOLOGY: The Beneish M Score eight variable statistical model was applied to secondary data of the selected bank from 2011 to 2018. The model utilizes ratios in distinguishing between manipulators and non-manipulators, with a yardstick measure of -2.22. Results greater than -2.22, classify the organization as a financial statements manipulator with less than -2.22 classify it as a non-manipulator.RESULTS: The M score model detected manipulation for the years 2011 (-0.74), 2013 (-1.84), and 2015 (-2.19), which are greater than the benchmark of -2.22. The years 2012 (-3.17), 2014 (-2.46), 2016 (-3.07), 2017 (-2.80) and 2018 (-2.42) reveal the bank as a non-manipulator as these values are less than -2.22.LIMITATIONS: The Beneish M score statistical model was modeled for manufacturing companies. The study sought to test the M Score’s applicability in the banking sector and it was restricted to the selected bank for the years 2011 to 2018.CONTRIBUTION: The Beneish M score is a valuable model for users of issued annual financial statements to guard against earnings manipulation. Stakeholders rely on audited financial statements, believed to be free from manipulation, yet companies fold up with unqualified audit opinions contained in published financial statements. The study validates the Beneish M score statistical model for detecting manipulation in published annual financial statements in Zimbabwe, where there is limited research on earnings manipulation.peer-reviewe

Can Sound Corporate Governance Alleviate Corporate Failure? A Study of the Zimbabwean Financial Services Sector

This study, using the Ordinary Least Squares (OLS) Regression Model, investigated the extent to which good corporate governance practices can minimise or alleviate corporate failure in the Zimbabwean Financial Services Sector. The results of the study reflected that sound corporate governance has a positive effect on corporate success and can alleviate corporate failure. It is thus recommended that financial institutions continuously adhere to sound corporate governance practices to guarantee corporate success and alleviate the collapse of financial institutions as has been witnessed in the past. The findings of the study will assist policy makers, regulators and players in the financial services sector to adhere to sound corporate governance practices, given its impact on corporate success. Further research could be carried out with regards the implementation of sound corporate governance in parastatals, quasi-government institutions and private sector companies in other sectors other that the financial services sector and how it can be monitored or enforced

Tax Compliance Costs for SMEs: A Survey of Tax Professionals in Ghana

The study sought to ascertain the magnitude of the external tax compliance costs incurred by SMEs in Ghana from the perspective of the tax professionals who provide the service. Tax professional firms were selected from the Institute of Chartered Accountants and the Chartered Institute of Taxation for the study. The study distinguished between the average annual costs for small, medium and larger firms to compute and file returns, deal with tax authorities, implement changes in tax laws, and maintain records for tax purposes on behalf of their clients. The cost was found to be regressive in nature, indicating that the burden was relatively higher for small businesses

The role of the Zimbabwean government in the implementation of management accounting among small and medium enterprises

PURPOSE: This paper aimed to investigate the role of the Zimbabwean government in the implementation of Management Accounting Practices (MAPs) among Small and Medium Enterprises (SMEs). Management accounting is a crucial instrument for success, particularly for SMEs, according to earlier studies. The study noted that there is a dearth of literature on the government's support for the adoption of management accounting SME sector.METHODOLOGY: Semi-structured interviews were used to gather information from 88 participants. Zimbabwe has no SME database, hence, a chain referral sampling technique was used. The data were interpreted using qualitative content analysis.FINDINGS: The study found that there is little that is done by the Zimbabwean government in promoting the use of management accounting among SMEs The areas covered in government-sponsored training for SMEs are bookkeeping, entrepreneurship, and tax preparation; management accounting is not addressed.ORIGINALITY/VALUE: In order to increase public understanding of MAPs, the research advises the Zimbabwean government to conduct seminars, launch awareness-raising campaigns, and establish policies that encourage the use of management accounting.peer-reviewe

Adoption of Management Accounting Practices: Challenges and opportunities for small and medium-scale enterprises in Zimbabwe

Doctor of Philosophy in Management Accountancy, North-West University, Potchefstroom CampusProlonged periods of economic recession and the resultant informalisation of the Zimbabwean economy have meant that Small and Medium Enterprises (SMEs) are the new engines of economic growth. The Zimbabwean government's support mechanisms for SMEs and the decision to tax them are an implicit acknowledgement of the economic significance of the sector. However, the entrepreneurial beginnings of most SMEs often mean that their owners and staff lack the requisite business acumen needed to ensure the viability and sustainability of their businesses. SMEs are beset by a plethora of adversities, which lead to the closure of most SMEs. Scholars have advanced the view that the adoption of Management Accounting Practices (MAPs) by SMEs can mitigate the foregoing. MAPs have been shown to promote the efficiency, competitiveness, and viability of corporations. However, there is a paucity of literature that engages the use of MAPs by SMEs in Zimbabwe. Moreover, there is a lack of evidence of an existing management accounting framework that is tailored to the needs of Zimbabwean SMEs. It is against this backdrop that this study explored the use of MAPs by SMEs in Zimbabwe. The study also ascertained the benefits obtained through the use of MAPs among Zimbabwean SMEs. It further identified the factors influencing the adoption of MAPs among SMEs in Zimbabwe. Besides, the study established the role of the Zimbabwean government in the implementation of MAPs. Importantly, the study developed a management accounting framework for Zimbabwean SMEs. Data was gathered using focus group discussions and in-depth face-to-face interviews. This study used qualitative content analysis to interpret the data findings. The study revealed that there is a minimal adoption of MAPs, though there is a relatively high usage of traditional MAPs compared to contemporary MAPs among the SMEs under study. The study also discovered that there are diverse practices in the application of management accounting tools by entities within the same industry. In addition, the study found that among the five categories of MAPs, decision support systems and strategic management accounting are the least used, while budgeting systems and performance evaluation systems are moderately used, with costing systems being the most used of the five components of MAPs. The uneven and limited adoption of MAPs is attributable to an unconducive socio-economic environment, undercapitalisation, lack of knowledge of management accounting by SME owners and staff, organisation size, and the competence of accounting personnel. The study proposed a six-staged systematic implementation method that makes the application of MAPs less cumbersome and easy to implement. The proposed framework further systematises the application of MAPs in the SME sector. It can be applied to other similar contexts in the Global South. It is highly recommended that SMEs should apply management accounting as its use promotes competitive advantage and success for an entity. The study recommends that the Zimbabwean government should popularise MAPs by convening workshops, awareness campaigns, and formulating policies that encourage the use of management accountingDoctora

A contemporary view of management accounting, its genesis and evolution: A literature review

The paper analytically examines literature to elucidate the origin and evolution of management accounting buoyed on by the surge in appetite on its use especially during the last two decades. The paper further critically examines the wide critics on the “loss of relevance” of management accounting in enhancing performance explicitly in a modern rapidly changing business environment. A further attempt is made by this paper to better apprehend the concomitant application of traditional and contemporary management accounting practices. It further analysed the current level of appetite on the use of management accounting practices in both developed and developing countries. A critical review of related literature revealed that the history of management accounting can be traced back to the industrial revolution of the 1900s. The study also revealed that management accounting continues to evolve as companies meet new problems that need to be solved and management accounting practices that were used in the early 1900s are still applicable even today. The “loss relevance of management accounting” school of thought was dismissed as traditional MAPs that were used in the 1900s are still applicable even today. The study recommends the use of management accounting as it improves competitive edge and creates value for the organisation

A contemporary view of management accounting, its genesis and evolution: A literature review

The paper analytically examines literature to elucidate the origin and evolution of management accounting buoyed on by the surge in appetite on its use especially during the last two decades. The paper further critically examines the wide critics on the “loss of relevance” of management accounting in enhancing performance explicitly in a modern rapidly changing business environment. A further attempt is made by this paper to better apprehend the concomitant application of traditional and contemporary management accounting practices. It further analysed the current level of appetite on the use of management accounting practices in both developed and developing countries. A critical review of related literature revealed that the history of management accounting can be traced back to the industrial revolution of the 1900s. The study also revealed that management accounting continues to evolve as companies meet new problems that need to be solved and management accounting practices that were used in the early 1900s are still applicable even today. The “loss relevance of management accounting” school of thought was dismissed as traditional MAPs that were used in the 1900s are still applicable even today. The study recommends the use of management accounting as it improves competitive edge and creates value for the organisation

The development of a management accounting framework for small and medium enterprises operating in emerging economies

Purpose: This paper proposes a management accounting framework for Small and Medium Enterprises (SMEs) operating in developing countries. The development of the framework was motivated by the existing low uptake of management accounting and inconsistent use of Management Accounting Practices (MAPs) by SMEs, especially in emerging economies. The model framework advanced in this paper is meant to regularise and systematise the use of MAPs by SMEs.Methodology: The study adopted a qualitative research approach using semi-structured interviews. A total of thirteen focus group meetings, nineteen face-to-face in-depth interviews and twenty-one key informant interviews were conducted in five provinces in Zimbabwe. Data was analysed following a reflexive thematic analysis through content analysis using Atlas. ti.Findings: The paper proposed a six staged systematic implementation method that makes the application of MAPs less cumbersome and easy to implement. The framework can be applied to other similar contexts in the Global South. It is highly recommended that SMEs should apply management accounting as it use promotes competitive advantage and success for an entity.Originality/Value: The framework is envisaged to increase the usage of management accounting among SMEs as well as reducing inconsistencies in the application of MAPs among SMEs.peer-reviewe