A large and growing informal economy which is characterised by many small taxpayers have been a thorn in the flesh for many developing countries in as far as taxes are concerned. Public transport in Zimbabwe makes a significant part of the informal sector and is provided by private operators. The study probe the efficacy of presumptive tax in collecting revenue from commuter omnibus operators in Bulawayo, Zimbabwe. The paramount object of this paper was to explore the presumptive taxation system and assess its appropriateness in the informal sector by identifying the merits and demerits. It went on to identify the possible causes of nontax compliance in informal sector and examine the effectiveness of delegating tax collection on certain tax heads to other local authorities or private enterprises. The study employed a purely qualitative data collection approach using questionnaires and interviews in a descriptive survey. A sample of 60 respondents and simple random sampling was drawn from transport operators for questionnaires. Purposive sampling was adopted for 10 interviews made up of participants from the Zimbabwe Revenue Authority (ZIMRA) and officials from transport associations. The vital outcomes of the research revealed that most taxpayers are ignorant of their presumptive tax obligations and ZIMRA needs to do more on tax workshops and campaigns to increase awareness and compliance. Major recommendations include the need for strengthening taxpayer education and awareness with regards to presumptive tax through aggressive informative and awareness promotions by ZIMRA at all levels. Collaborations with Informal sector associations in Zimbabwe and transport operators in setting up an effective presumptive tax system that reflects interests of all stakeholders is recommended. In addition the Revenue Authority is urged to take advantage of the advanced technology in tracking tax defaulters.
Keywords : Presumptive Tax, Informal Sector, Compliance, Transport Operators, Bulawayo.