An Analysis of the Buoyancy of Corporate Tax in Zimbabwe (2009- 2018)

Abstract

The study examined the buoyancy of corporate tax in Zimbabwe. The specific objectives of the study were; to establish the buoyancy of corporate income tax., identifying the weak and strong spots of corporate income tax and to draw policy recommendations. The study employed OLS approach and used quarterly time series data for the period 2009 to 2018 and buoyancy estimates were determined using a double logarithmic model. Secondary data from Zimbabwe Revenue Authority, Reserve Bank of Zimbabwe and Zimbabwe Statistical Agency was used. The study revealed that corporate tax is responsive to changes in national income in Zimbabwe and there is a positive relationship between corporate tax and gross domestic product, although the degree of buoyancy is low and less than the unitary figure one. With corporate tax not buoyant, Zimbabwean government has to re-evaluate the implementation strategies and pursue further reforms for it to fully exploit tax revenue potential in the economy.