Chronicle Editor
Jacqueline Ntaka
ZIMBABWE’S informal sector is estimated to account for over 60 percent of the country’s GDP, according to the International Monetary Fund (IMF). However, this sector remains largely untaxed, depriving the Government of much-needed revenue to fund public services and development projects. The Zimbabwe Revenue Authority (Zimra) has been facing challenges in collecting taxes from the informal sector such as vendors due to various factors such as lack of formal records, evasion, corruption and high compliance costs.
One possible solution to this problem is to leverage the power of artificial intelligence (AI) and information and communication technology (ICT) to enhance tax administration and compliance in the informal sector. AI and ICT can offer several benefits.
AI and ICT can simplify and automate tax registration, filing and payment processes, reducing the time and cost for both taxpayers and tax authorities. Zimra can use mobile applications, online platforms, or USSD codes to enable vendors to register for Value Added Tax (VAT), submit
their returns, and pay their taxes electronically, using their mobile phones or other devices.
The two improve tax data collection, analysis and verification using various sources such as digital transactions, electronic invoices, GPS tracking, satellite imagery and social media. For example, Zimra can use AI algorithms to cross-check the data reported by vendors with the data obtained from other sources, such as banks, mobile money operators, suppliers, customers or third-party platforms, to detect any discrepancies or anomalies and to identify potential tax evaders or under-reporters.
AI and ICT can enhance tax education, awareness, and communication, using various channels, such as SMS, email, chatbots or voice assistants.
Zimra can use AI and ICT to provide vendors with relevant and timely information on tax laws, rates, deadlines, incentives and penalties, as well as to answer their queries, resolve their issues, and solicit their feedback, using natural language processing and machine learning techniques.
There is also no doubt that AI and ICT can Increase tax incentives, rewards and recognition by using various mechanisms, such as discounts, vouchers, coupons or certificates. Zimra can use AI and ICT to reward vendors who comply with their tax obligations, or to recognise vendors who contribute significantly to the tax revenue, using gamification or social media features.
By using AI and ICT, Zimbabwe can tap into the potential of the informal sector, and increase its tax base, revenue and efficiency.
This can also benefit the vendors, who can enjoy lower costs, easier processes, better services and more incentives from the tax authorities. Moreover, this can foster a culture of tax compliance, transparency, and accountability in the informal sector and improve its contribution to the national economy and development.
This can help Zimbabwe achieve its vision of becoming an upper-middle income country by 2030 as outlined in its National Development Strategy.
l Jacqueline Ntaka is the CEO of Mviyo Technologies, a local tech company that provides custom software development, mobile applications and data analytics solutions. She can be contacted on [email protected]
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