CHAPTER ONE 1.

0 Introduction

One of the more vexing problems for policy makers in developing and transition economies is encouraging high levels of tax compliance. This issue is independent of the overall tax take from GDP. For, even if one begins from a position that government should be small, high tax compliance is necessary for efficiency and equity as well as for the development of social capital (Slemrod, 1998). As Cowell (1990) notes, the issue of evasion is, unlike other illegal activities, inseparably bound up with the instruments of fiscal auditing and control that the government attempts to use in carrying out its economic policy. While reducing evasion improves the governments revenue, it is a broader issue for the development of a civil order (Knack and Keefer, 1997). Governments, the world over look up to their revenue collectors that is tax administrators and/or revenue authorities for funds to spur on their economies. Thus, the need for all revenue authorities to promote compliance with provisions of their respective country taxation laws, and for the governments to ensure their respective tax agencies conform and responsibly enforce the laws, thereby contributing to economic well-being of the country. The Zimbabwe Revenue Authority (ZIMRA) has the mandate to collect revenue on behalf of the state. As with virtually all revenue authorities The Zimbabwe Revenue Authority (ZIMRA) has to a large extent implemented the self-assessment approach to tax assessments. Because the self-assessment system depends on clients assessing themselves, ZIMRA has been faced with the problem lack tax compliance from its clientele. The problem includes vices associated with the collection of taxes like, tax evasion, filing of wrong tax returns and claiming of undeserved tax refunds. Therefore ZIMRA put up an audit to ensure tax compliance and responsible enforcement is adhered to. Generally, the universally accepted definition of auditing is the evaluation of a person, organisation, systems, processes, enterprise, project or product. The goal of an auditing is to express an opinion of the organisation or person in question based on an evaluation of financial statements or other relevant information pertaining to that particular organisation or person. Auditing is also meant to detect any fraud or errors in the books of accounts and to detect any fraud or errors in the books of accounts. The specific deterrent effect of tax audits indicates

the enhancement of voluntary compliance by ensuring audited taxpayers comply with the provision of the current tax laws and regulations. furthermore, tax auditing allow tax auditors to educate taxpayers on the application of tax laws, to identify improvements required for record-keeping, and to identify areas of tax laws that taxpayers need clarification (Organisation for Economic Cooperation and Development, 2006).

1.1 Background Information The Zimbabwe Revenue Authority was established on the 19th of January 2001 and became fully operational on the 1 September 2011. It was created by the Revenue Act on February 2, 2000. Since inception it has been faced with the problem of lack tax compliance from its clientele. Like most other government appointed revenue collecting agencies, the Authority put up an audit section in order to short circuit revenue leakages which are coming out of non-compliance. Compliance Stainely J, (1999) defines compliance, as an act of obedience to a command or request. The Oxford English Dictionary states that it is the capacity to yield under an applied force. Compliance to the law means that activities undertaken agree with the set rules and regulations under which is required by the law that governs the activity. Sanford et al (1995) defines compliance as meeting the requirements laid down in complying with a given tax structure and it will involve collecting and accounting for the right amount of tax. Lack of compliance is inherent in the self-assessment system because most clients understates their returns, so as to pay less, however auditing is one of the most effective ways of increasing compliance. According to Simpson S. (2001), under this universal adopted and applied self-assessment system, given the limited resources at the exposure of especially African revenue authorities, a risk based tax audit approach is an effective tool to curb tax fraud and tax evasion. On the other hand, the underlying principle of fairness in the tax system dictates that, tax authorities must demonstrate a transparent and a non-discriminatory treatment approach to taxpayers in order to bring credibility in the audit system. Therefore the research seeks to give an assessment of how auditing has influenced the compliance of the Zimbabwean tax business partners or clients in terms of Examination of returns as an effective tool for compliance, main trigger

for tax audit; audit selections methods, criteria, and approaches, developing an effective audit planning and demonstrating procedural fairness to solicit taxpayers cooperation and maximum revenue yield. The paper also seeks to analyze the whether the authoritys current audit approach is sufficient in combating the ever crafty non-compliant tax payers and consequently if the right amount of tax is being remitted in accordance to the current legislation Revenue annual Performance-Growth. 1.2 Problem statement: ZIMRA, the countrys tax administrator have been doing its best in meeting revenue targets set by the parent ministry (Ministry of Finance), however it is faced with major challenges, in the general transacting public and business in particular is resisting the remittance of withheld government taxes. Given these imperatives, the authority has put in place an audit department responsible for unearthing such misdeeds, and makes the clients pay what is due to the state plus interest and penalties. Generally the public and the corporate world have greatly done a disservice to the nation in terms of adhering to tax legislation. Also the proliferation of informal traders over the past years has contributed negatively to the taxmans work, as many complications have arisen as he attempts to collect of revenue for the fiscus. Zimbabwean taxpayers generally, due to economic hardships have seemingly developed into bad apples, as over the past years, the number of non-compliant taxpayers and tax evaders increased, and this is substantially affecting the collection of revenue. Experience has shown that clients are antagonistic when it comes to remitting taxes is due to the state, they are reluctant to pay taxes and they try by all means to evade. Many business partners falsely declare their sales and incomes, claim input tax using other invoices besides tax invoices, import goods and vehicles with fake documentation, some clients eligible for registration with the Authority try by all means to escape registration and others abuse rebates by importing goods through privileges meant for the country less fortunate society for example the disabled.

As a result the audit section has been mandated to unravel such mishaps through risk profiling clients, carrying out audits on the suspected clients, compliance checks of all tax heads and registering new clients for payment of relevant taxes. Therefore the purpose of this research is to try and assess the impact of auditing by ZIMRA on Zimbabwean taxpayers.

1.3 Research objectives This research is aimed at assessing the impact of auditing on Zimbabwean taxpayers compliance, and also sought to determine the extent to which the audit section has been successful in sealing revenue loopholes in the economy. The research will also come up with complimentary ways of improving the system to make it cover most parts of the tax regimes and clients. Also the research will seek to suggest and recommend measures that will improve the sections, thus enhancing effectiveness and efficiency in revenue collections.

1.4 Research questions 1. What are the functions of the audit section? 2. What is the mandate of the audit section in ZIMRA? 3. Is there any significant increase in revenue and consequently taxpayer compliance, as a direct result of auditing? 4. How is the response from taxpayers after carrying out an audit session? 5. Is Audits Section necessary to ZIMRA business? 6. Are there any ways to improve the Audits Section so as to improve collections? 7. What impact does audit section has on client compliance?

1.5 Hypothesis

H1: Auditing has a positive impact on compliance. H2: Auditing has no effect on compliance. 1.6 Rationale of the study As witnessed in other countries successful effective risk-based audit approach ensures that tax compliance and leads to effective reduction in leakages resulting in increased revenue collections. The research will dwell on challenges which ZIMRA is facing and also will put out the need to evaluate the effectiveness of the current ZIMRA auditing in client compliance and consequently generation and collection of revenue. Tax compliance is a complex behavioral issue and its investigation requires the use of a variety of methods and data sources. Therefore the research will try to address the challenges by suggesting the possible solutions, making the research well-timed and relevant.

1.7 Limitations The researcher has little time to come with a more comprehensive research as he is a full time employee. The researcher is expected to carry out all his duties at work and leaves little time for the research, especially field research. The researcher is also faced with financial constraint as he has to move to different places in order to reach some respondents, as he carries out field research. Also some financial resources will also be required to carry out desk research e.g. the internet. The researcher is also faced with organisational challenges in that, the employees have signed an oath of secrecy and therefore they are not readily available to divulge information for the research. As a result the researcher will depend on a limited sample hence a full scale research will not be achieved. 1.8 Delimitations ZIMRA and the business community (especially those who do business

transactions and are registered with ZIMRA) are the areas to be covered by this

research. The research will mainly focus on the impact of auditing on Zimbabwean taxpayers compliance, as ZIMRA carry out its core function of revenue collection. 1.9 Summary The chapter gives an overview of what the research comprise. The research starts with an introduction and background, before emphasis is placed on the main purpose or objective of the study, which is an assessment of the impact of auditing on tax compliance of the Zimbabwean tax payers. Also the paper looked at the rationale of the study, null hypothesis and alternative hypothesis, before the research brought to light the limitations and delimitations faced. In Chapter two the researcher will expand and outline the related ideas and topics so that the research will be comprehensive. Chapter three will dwell on the methodology the researcher will use to gather data; Chapter four will outline findings in graphs, charts and tables and then Chapter five for recommendations and conclusion of the research. CHAPTER TWO LITERATURE REVIEW AND THEORATICAL FRAMEWORK 2.0 Introduction The researcher will start the chapter with important definitions that are likely to be encountered in the project write up. Then, he is going to outline the theoretical and empirical literature that other authors have contributed in tax auditing and compliance. The contributions will be from developed and developing countries. 2.1 Important Definitions Auditing: A tax audit is an investigation into the background of tax returns submitted by an individual or business to a tax agency or authority. Taxation: this is an amount paid to the government, is based on your income or the cost of goods or services you have bought (Oxford Dictionary) Compliance: is an act of obedience to a command and request or as the capacity to yield under an applied force, (The Oxford Dictionary). Compliance to the law means that activities undertaken agree with the set rules and regulations under which is required by the law that governs the activity. Sanford et al (1995)

defines it as meeting the requirements laid down in complying with a given tax structure and it will involve collecting and accounting for the right amount of tax. 2.2 Theoretical and Empirical Literature Review The idea of a tax audit normally conjures up feelings of anxiety even in persons who believe their tax documents are perfectly in order. While it is true that a tax audit may be called due to some perceived irregularity in one or more returns, it is also true that an audit may be done simply as part of a random sampling, (Sanford et al, 1995). There are different types of auditing, and the most popular ones are paper audit and field audit and they are explained by previous literature and studies as follows. According to Kelly Phillips, (2001), one either gets picked for a paper audit or an in-person audit, a company must have a representative for the business owners during an audit, but usually the representative must also have been audited. A paper audit typically only occurs if one has made a minor error that can easily be fixed with additional documentation or payment. It's usually triggered by some discrepancy between the information you filed on your return and other information from banks and past returns that the Inland Revenue Authority (IRA) has on file for you. Fortunately, this type of correspondence from the IRA is easily cleared up if one can provide the necessary documentation on a particular expense or deduction. The most common type of audit that small businesses face is the field audit, in which one actually meets with an IRA agent. This can occur either at the IRA office or at your place of business. Schneider, (1999) says, "Typically they'll want to visit your place of business at least once." You will receive notice of a field audit through the mail, never by e-mail. If you receive an e-mail notice, it's a scam and you should contact the IRA immediately. The paper letter will provide you with a date by which you must contact the IRA to schedule an audit appointment. The letter will also assign you an IRA agent and list the documents the IRA wants you to produce. Even if you don't have all of the documents in order by the date they request, do contact the IRA office before the deadline. Waiting too long to respond may arouse suspicion that you have something to hide. John Baiardi, (1997) says The worst situation you can be in is

if they ask you for something, and the request sits on your desk for a long time. That puts you on the defensive." Most governments around the world include an agency, (for Zimbabwe its ZIMRA), which is charged with overseeing the process of tax collection from individuals and companies that reside within the jurisdiction. For the most part, the agency focuses on defining the processes involved with calculating and paying taxes. However, most tax agencies also review tax returns routinely as part of the process of correcting minor errors that may be present on any given return. As part of the review process, tax agencies may use a policy of randomly selecting a few returns for auditing. When this is the case, there are normally not any punitive measures involved. The taxpayer simply brings along copies of the filed returns for the period cited, along with support documentation, and meets with a representative of the tax agency. If all deductions and earnings can be supported with documentation, the matter is considered complete. According to Smithson R (2001), audits may also be conducted if the tax agency finds reason to believe deductions are not allowable or if there was a deliberate attempt to hide earned income. When this is the case, the government will often call for a tax audit to clear up and discrepancies. If the taxpayer can provide proof that the initial return was complete and correct, then all is well. If the tax agency finds that a deduction is not allowed, the return is recalculated and interest penalties may apply. While a tax audit is normally considered routine, it has gained a reputation of being an extremely nerve wracking process for the taxpayer. However, many government tax agencies attempt to make the process of the tax audit as comfortable as possible for all parties concerned. Alvious. B.K (2002), in his research paper entitled Revenue Audit Strategies and Implementation in India, he outlines the strategies for conducting revenue audit in the public sector. He argued that revenue audit assumes great importance for most developing countries and could not be ignored anymore as taxation as an instrument of growth is increasingly used by all and that there is a growing realization that tax policies must be tuned for equity and generation of financial resources for development. The author asserts that most developed countries have fine-tuned their long term taxation policies and therefore their taxpayers are generally not subjected to frequent changes in the tax rates. The developing countries, on the other hand, have to grapple with issues that could possibly result

in increased tax augmentation. He observed that a less developed country would mostly collect its taxes indirectly on production, distribution and transactions, whereas direct taxes, on income tax, corporate tax and wealth tax, are relatively given more importance in developed countries. Thus, revenue audit strategies would be dependent on the stage of development of respective countries. The author concluded that revenue audit strategies and implementation are important issues in ensuring that taxation laws, policies and their implementation enable revenue collection in an efficient, effective and economical manner. There was emphasis on the need for innovative use of computerized database linked audit tools. In another research paper entitled Economic Innovation Challenges of Financial and Tax Auditing. Wonglimpiyarat (1999), the research maintained that a Certified Public tax Accountants (CPTA) profession in the Revenue Department of Thailand will result in a paradigm shift in auditing and bring tax fairness to the society. The research concluded that in as far as the revenue code is concerned; auditing will not be confined to the examination of accounting records according to the law but will also inculcate accurate and proper reporting of accounting records for tax purposes. This paper recommended that revenue authorities should increase capacities of tax auditors to become certified public tax auditors. Such a new approach to auditing, they said would result in taxpayers being willing to participate in the revenue administration rather than wait for revenue officers to check status of their books. The findings to this research revealed that tax auditing will result in high quality audits to the financial reporting processes for statutory purposes and enhance the states ability to collect tax and improve the performance of the tax system.

Zimbabwe is ranked among low-income countries or low compliance countries with hard task of ensuring efficient and effective tax administration. In order to ensure tax compliance, hence raising more revenue. Administration of tax is by Zimbabwe Revenue Authority (ZIMRA) established through an Act of Parliament. ZIMRA is supposed to promote compliance and to ensure responsible enforcement by highly motivated and professional staff thereby maximizing revenue collection at least possible cost for the social-economic well-being of Zimbabweans. The purpose of ZIMRA is assessment, collection, administration and of tax laws with

professionalism governed by integrity and fairness. To achieve this purpose, is divided into regions such as Region1 to 4, and Beitbrigde and departments such as domestic customs, domestic taxes and support services department. ZIMRA administers different types of taxes under different Laws (Acts) such as Income Tax, Value Added Tax, Custom duties and Excise Tax among many others. Hence, ZIMRA is supposed to ensure taxpayers comply with the respective tax laws. Tax compliance is a complex term to define. According to Brown and Mazur (2003), tax compliance is multi-faceted measure and theoretically, it can be defined by considering three distinct types of compliance such as payment compliance, filing compliance, and reporting compliance. Organisation for Economic Cooperation and Development (2001) advocates dividing compliance into categories in considering definitions of tax compliance. These categories are administrative compliance and technical compliance where the former refers to complying with administrative rules of lodging and paying otherwise referred to as reporting compliance, procedural compliance or regulatory compliance and the latter refer to complying with technical requirements of the tax laws in calculating taxes or provisions of the tax laws in paying the share of the tax. Theoretically, views of the taxpayers and tax collectors are that tax compliance means adhering to the tax laws, which are different from one country to another. The goal of tax administration is to foster voluntary tax compliance (Silvani, 1992) and hence reduce tax gap (difference between taxes paid and owed for all taxes and all taxpayers) and compliance gap. Tax compliance, according to Cobham (2005), is a problem to many countries as measured by tax to GDP ratio although it has been improving for many countries. For example, its one-third of GDP in rich countries; Latin America and the Caribbean - 17% of GDP and low-income countries (in Sub Saharan Africa) showed less than 15% to GDP (the recommended rate). It remains a big challenge to low income countries. This has promoted radical tax reforms in countries like Bolivia, Uruguay, Colombia, Jamaica and Spain with notable success (Bird & De Jantscher, 1992). Research on tax compliance can be done in various fields such as accountancy, economics, criminal law, psychology, and sociology (Fischer, et al., 1992). Alm (1991) defined tax compliance as the reporting of all incomes and paying of all taxes by fulfilling the provisions of laws, regulations and court judgments. Another definition of tax compliance is a persons act of filling the Income Tax Form, declaring all taxable income accurately, and disbursing all payable taxes

within the stipulated period without having to wait for follow-up actions from the authority (Singh, 2003). Skarter (2003) Tax compliance can be defined as the degree to which a taxpayer complies (or fails to comply) with the tax rules of his country. Roth et al. (1989) explained that taxpayers need to prepare all the relevant information in the Income Tax Form within the period given, and the form must report accurate tax liability in accordance with the needs of laws, regulations, and court judgments. Those who fail to adhere to taxation laws intentionally or otherwise shall be considered as having committed an offence. Generally the tax compliance requirements according to tax laws relating to businesses are: Keeping of up to date books of account by businessmen, acquiring of Personal Identification Numbers (PIN/BP) by all potential taxpayers, determining the taxable income according to the stipulated rules and regulation, accurate determination of tax liability, filing of returns on income by the prescribed date, paying of tax dues by the prescribed date, payment of fines and penalties for overdue taxes and allowing of audit by tax collectors if deemed necessary (Gupta et al, 1997) As a solution to non-compliance, The administration must act promptly against non-compliance. This implies the need for prompt processing of the returns and payments, identification of stop filers and non-filers and delinquencies, fast follow up on non-compliance so that taxpayers and encouraged to comply and the imposition of appropriate penalties and interest charges in case of identified default so that taxpayers are discouraged from repeat offences and that the benefits of the past offenses are removed, (Dos Santos P, 2001). Having defined and explained auditing as well as compliance, what is left for the researcher is to dwell on the core of the research, which is the impact of auditing on the compliance of the tax clientele. The attitudes of tax auditors during the conduct of an audit may affect corporate taxpayers compliance behavior. The way in which tax auditors interact with taxpayers during an audit may influence their compliance behavior in the future. For example, if taxpayers are treated with respect during the audit, taxpayers may have a stronger incentive to comply voluntarily (Isa and Pope, 2001); arbitrary audit procedures leave taxpayers feeling helpless and thus reduce their intrinsic motivation to comply (Frey, 1997). Similarly, a responsive and fair administration of the tax audit may positively influence compliance behavior (Braithwaite, 2002, Smith, 1992). In addition, if

taxpayers trust the tax auditors, taxpayers voluntarily comply with audit requirements (Pope and Isa, 1999). The impact of auditing on compliance can be explained by a basic model based on Allingham and Sandmo (1972) and Yitzhaki (1974). Suppose that an individual receives a fixed amount of income I, and must choose how much to declare to the tax authorities. Declared income D is taxed at the rate t. unreported income is not taxed; however, the individual may be audited with probability p, at which point a fine f is imposed on each dollar of unpaid taxes. If underreporting is detected the individual's income IC equals IC = I - tD - ft(I-D), While, if underreporting is not detected income IN is IN = I - tD. The individual chooses D to maximize the expected utility EU(I) of the evasion gamble, or EU (I) = pU(IC) + (1-p) U(IN), Where utility U(I) is assumed to be a function only of income. This optimization generates the first order condition pU'(IC)(f-1)t - (1-p)U'(IN)t = 0. This is the basic portfolio model of tax compliance. It is straightforward to show, within this model, that increases in the probability of an audit and or the fine rate will increase compliance. The effect of the tax rate is ambiguous unless the fine is applied proportionally to the tax evaded (as in equation1) in which case as the tax rate increases evasion falls (Yitzhaki, 1974). Given the enforcement resources available to most governments, the observed high compliance rates are inconsistent with rational behavior. Uncertainty regarding the actual audit practices may play a role. Audit probabilities are largely subjective since the tax authority does not have an incentive to reveal the entire audit mechanism (Alm, 1988) and individuals may have a tendency to overweight the probability of an audit. Such behavior could support high levels of compliance even with low objective probability of an audit (Bernasconi, 1998). Nevertheless, extreme degrees of risk aversion would be required to explain observed levels of

compliance. Other factors must be at work. For simplification, is it assumed that the tax authority uncovers all unreported income tax compliance is enhanced when individuals view the paying of taxes as a fair fiscal exchange. In such situations compliance is likely to increase, ceteris paribus. In particular, when the services provided by the government are viewed as widely desired and the decisions determining the services provided are transparent and fair, compliance is likely to be higher. This latter factor is not captured in the conventional portfolio model of tax compliance. Nevertheless, it is clear that these interactive effects may affect tax compliance decisions. The manner by which the public budget is determined is likely to have an effect on the level of compliance. Alm, Jackson, and McKee (1993) find that compliance is higher when the public good is voted on, rather than imposed, and when the political outcome is known to be widely supported. Further, the manner in which the enforcement rules are determined can also influence compliance (Alm, McClelland, and Schulze, 1999). Social norms and morals have been cited as reasons for high compliance with rules (Elster, 1989) and collective actions (Naylor, 1989). Even simple personal ethics based on religion or cultural norms may affect tax compliance behavior independently of the fiscal exchange between the government and the taxpayers (Steenbergen, McGraw, and Scholz, 1992). . Taken together these factors would lead us to modify equation 4 above to the following: pU'(IC)(f-1)t - (1-p)U'(IN -)t = 0, Where denotes the psychic cost associated with evading taxes even if one is not caught. The greater the moral support for government the higher the size of . Generally the effects of tax audits refer to increased compliance by most taxpayers. For instance, Darlin et al (1990) found that ... for every return submitted, because of taxpayer audits, an additional six were submitted, as they were indirect effects or ripples on individuals not actually audited. As seen from the above literature, generally auditing has a great has a great influence on the way clients behave in terms of submission of returns as well as updating their accounts or paying up, thus increase revenue. However the implementation of risk based auditing in developed and under developed countries, makes audit results vary as the conditions, stages of development, resources and operating environments differ. The studies show that auditing is

very fruitful or yielding in the developed world. In developing countries the effects of auditing on compliance have various results, because of different economies, stage of development and political situation. Thus the need to carefully examine or assess the audit sections put in place by the government agent, as to whether there is a positive impact on compliance, if not what needs to be done to have a more effective approach to counter the inherent vices in tax administration.

2.3 Conclusion Most researches mainly focus on the auditing system working in developed economies, and dwells much on defining the various types of audit approaches and models as a tool to increase revenue collection. However some researches, looked at the effects of auditing on in policy making in their economies, but however ignored to examine how clients respond to audits and to what extent is the audit process effective. Therefore the research tries to give a detailed assessment, being a Zimbabwean case of the impact of auditing on compliance of the clients.

CHAPTER THREE METHODOLOGY 3.0 Introduction The researcher used different methods for data collection, this chapter outlines the research methodology employed in this study. A research methodology defines what the activity of research is, how to proceed, how to measure progress, and what constitutes success. The researcher used methods such as face to face interviews and questionnaires. Generally it shows the research design, subject population, sample size, data collection methods and sample size. 3.1 Research design Research design is an organised approach, plan, strategy or a set of instructions for steering a research project, it details the type of research instruments, types of data to be used and the sample data, surveys, observation and experiments in coming up with the research paper. Descriptive research It gives a clear picture of the subject on which you wish to collect data, also provides a sound basis for the solution of tax compliance problems, even though it does not explain the nature of the relationship involved. Generally it involves simple data gathering to investigate possible relationships between variables in making predictions about future events. Descriptive research gave a good picture of the position of tax compliance at a given time. Covered many variables of interest and is flexible in nature and can take care of simple analysis as well as complex statistical methods. It however tends to rely too much on numbers, can be affected by poor quality of interviewers

or supervisors and tends to view the population in terms of too many generalizations. However to take measures, sampling will be used in this research.

Research subjects (sampling) - is the manner of coming up with an adequate number of elements to represent a population. The size or number should be enough to enable the researcher to produce fair and reasonable outcome. The research had twenty five questionnaires distributed to various ZIMRA registered clients in different industries. Population - This is a group of individuals that have some characteristics in common that are of interest to the research. Sample Population Means a subset of a targeted population. The research paper will have a population or sample frame, ranged from professional clients from various industries, who are registered with ZIMRA and operates in Harare. Twenty five respondents were chosen to represent the population. 3.2 Data Collection Techniques and Research Instruments Primary data collection. Data is information collected or generated by the researcher for the purpose of the project immediately at hand. Primary data can be in the form of questionnaires, for example, which can defined as as a paper normally distributed by the researcher, to be completed by the respondents seeking their truthful opinions and interests. (Coolican, 1990) the questionnaires consisted of openended and close ended questions. The structured questions allowed the respondent to simply select responses from the supplied responses. This made the data more objective, easy to tabulate and analyse. collected for the first time. Secondary data collection. This is data that has been used by other researchers for other purposes but related to this study, basically it is data from previous records. The researcher collected previous reports, that is monthly and weekly and company court rulings from Harare audits office, ZIMRA previous publications, and National fiscal budgets from the Ministry of Finance. Other sources of data for the researcher were obtained from the internet and previous published newspapers. For the research it was

Advantages of using an interview questionnaire a) Respondents understood questions which were asked by the researcher. b) The questionnaires were fast and economical to print and collect data, moreover data was collected from all the respondents over a relatively short time. c) The questionnaires assisted in lessening bias as respondents answered questions on their own. d) Questionnaires also allowed respondents to preserve anonymity as respondents did not write their names. Disadvantages a) Most respondents, didnt have enough time to answer or respond to the questionnaires b) Semantic challenges also made it difficult for respondents to answer to the specific requirements of the question, so as to come up with the anticipated data. c) Also another drawback is that questionnaires are impersonal, therefore the data collected tend to be generalised. Stratified Random Sampling Coolican (1990) defines stratified sampling as. the process of selecting a number of individuals for a study in such a way that the individuals represent the larger group which they are selected. In a stratified sample the sampling population is divided into non-overlapping groups or strata. A sample is taken from each stratum, and when this sample is taken, it is referred to as stratified random sampling. The researcher took samples of respondents or clients from different types of industry each in their own group. Advantages of stratified sampling a) It achieved more accuracy as strata were chosen so that respondents of the same stratum have the same character and interest. b) Helped reduce biases, from both the researcher and respondents. c) Very easy to administer as stratified samples were analysed separately as they have same interest and character. Disadvantages of stratified sampling a) The researcher faced challenges in coming up with the statas.

3.3 Data analysis and presentation Data analysis presents the overall procedures used in organizing, describing and analyzing data collected. These include, tables, graphs, pie-charts and bar graphs, thus enhance the data to be more sensible. 3.4 Conclusion The above outlined the tools, advantages and disadvantages of the tools the researcher employed in coming up with the research project, that is the research design, population, research instruments as well as the sampling techniques.