Assessing the Impact of Transactional Taxes on the Financial Performance of Large-Scale Retailers

This study explores the impact of transactional taxes on the financial performance of large-scale retailers in Harare, with a specific focus on the Pick n Pay retailer. Unlike previous studies that broadly address taxation effects, this research uniquely examines how transactional taxes, particularly compliance costs, tax information availability, and excise duties, influence operational and investment decisions in Zimbabwe’s retail sector. A quantitative methodology was employed, using structured questionnaires, to gather data from financial and compliance officers. The responses were analysed using statistical software to determine the relationship between tax factors and financial performance. Findings reveal that while Zimbabwe Revenue Authority (ZIMRA)’s tax rates showed no consistent effect on compliance, the availability of accurate tax information significantly enhanced the adoption of transactional taxes. Surprisingly, compliance costs were not seen as a major barrier to tax adoption or performance. However, excise taxes were found to deter investment, raising concerns over their fairness and impact. The study highlights the critical role of tax systems in shaping retailer performance and recommends enhanced tax education by ZIMRA and stronger compliance strategies among retailers. This research contributes new insights into the nuanced effects of transactional taxation in developing economies and supports the need for tax policy reform to sustain retail sector growth.