1. / IGC
  2. / Publications
Exploring scalable, efficient innovations to improve tax compliance among MSMEs

Barriers to tax compliance for medium, small, and micro enterprises (MSMEs) in Zambia

Policy brief Firms

Authors

Brigitte Seim

Assistant Professor, University of North Carolina
  • This study examines the barriers that contribute to the low levels of tax compliance among MSMEs in Zambia.
  • The brief presents findings from an original survey conducted among 1390 respondents in 52 market hubs in Lusaka and Central province of Zambia.
  • The researcher finds a tax compliance rate of on average 30 percent among these MSMEs.
  • The findings reveal several key barriers to tax compliance among this group: MSMEs report low business profitability and high tax rates as key individual barriers to compliance; these businesses also report facing intractable logistics to paying taxes to the Zambia Revenue Authority (ZRA); perceived and actual levels of audit are low with only 7.4 percent of MSMEs having ever been audited for compliance; MSMEs have negative perceptions about what revenue collected by the state is used for further dampening the desire to comply.
  • The author makes several policy recommendations for improving compliance among MSMEs.

More from IGC

Gender equality

Is discrimination in access to capital behind gender gaps in business in Ethiopia?

Ketki Sheth, Shanthi Manian
Blog
Gender equality

Paternalistic gender discrimination: Evidence from labour markets in Bangladesh

Nina Caroline Buchmann, Carl Meyer, Colin D. Sullivan
Blog

Gender discrimination in access to capital: Experimental evidence from Ethiopian SGBs

23 February 2024 16:00-17:00
Past Webinar

Insights from the 2023 Firms, Trade, and Development Conference

Atl Castro Asmussen
Blog
Themes
Firms
Countries
Zambia