ADOPTING AN ENABLING TAX CULTURE

In my experience working with SMEs, I have observed that tax compliance is a difficult task even when one understands their tax strategy. As a result, obtaining a valid tax clearance certificate is the only pain point, sadly.

‘Culture eats strategy for breakfast.’

It cannot be over emphasized that good corporate culture allows for the vision to thrive and passions to be harnessed thus cultivating intended results. A culture that stimulates the attainment of the tax strategy objectives is one that promotes ease of adoption of the ever-changing tax laws as well as encourages transparency and communicative behaviors by all stakeholders.?

How to Develop a Winning Tax Culture

An SME needs to employ the Train Display Relate (TDR) model for developing a winning tax culture. This model focuses on embedding tax culture in the governance framework of the business concisely. It also allows ease of scale when more complex tax culture models need to be adopted due to the business’ evolution.

The model has three pillars feeding into the other.

Train

Most smes often work in closed circles of management teams (comprising family and friends as well as the business’ employees) which are often a mash-up of different role players. This allows for effective communication between those that make key decisions. It is critical for tax knowledge and information to be shared seamlessly and be engraved in the commercial decisions made in the business.?

Having a tax expert as part of the team is often expensive. Consequently, holding training and tax health checks can be an effective way of developing a tax go-to person within the team - normally the person responsible for the finance function of the SME. Having developed them ensures tax talks within the team are informed and guided allowing everybody to be aware of tax aspects of the business model as well as ongoing tax compliance issues.

Display

What gets displayed gets celebrated. Wins no matter how small are necessary for keeping the aura of passion infused within a SME environment. Displaying tax clearance certificates on your front desk or co-working space and your virtual office (website) not only demonstrates responsible business and corporate citizenship but also fulfills legislative requirements. The tax strategy itself can also be placed in an auspicious cabinet for all, including visitors, to see. This communicates vision and boldness which is necessary for enriched engagement with stakeholders.

Relate

Relating is all about transparency and communication. A culture that encourages relating supports collaborations. Critical to the employment of a tax strategy is the ability of internal and external stakeholders to collaborate. For example, maintaining relations with ZIMRA helps generate a tax profile that works for the business by ensuring quick access to the tax authority’s resources via the liaison officers. How the business does tax things should not be a secret to key stakeholders.