3. 2021

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Browsing 3. 2021 by Author "Dr. Koske, Naomi"

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    Perceived effects of tax policy on organizational performance of gambling and lottery companies in Nairobi County, Kenya
    (KESRA/Moi University, 2021) Liban, Shedho Mohamed; Dr. Macharia, Irungu; Dr. Koske, Naomi
    Organizational performance in the betting industry can be measured by the revenue they generate. The betting companies in Kenya have been recording good performance since 2015. For instance, in 2015, betting industry made Ksh. 2.1 billion, this rose to Sh204 billion in 2018. However, the Kenyan government concern with betting companies is on tax. In 2018, the betting industry made around Sh204 billion but only remitted Sh4 billion in taxes. Moreover, most of the companies did not submit the 20% withholding tax on payouts. Sportpesa, Betin and Betway who together accounted for 85 percent of the market were accused of undercutting the tax man and ordered to close operations immediately. Due to the issues between the Government and betting companies over tax compliance issues, large betting firms in Kenya halted their operations in Kenya owing to what it termed as a hostile operating environment, with the taxation regime on the betting industry making the company‟s operations in the country unviable. Given the aforementioned, the general objective of the study was to establish the perceived effect of tax policy on organizational performance of gambling and lottery companies in Nairobi County, Kenya. Specific objectives were; to establish the perceived effects of corporate tax, withholding tax and betting tax on organizational performance of gambling and lottery companies in Nairobi County. The study adopted an explanatory research design. The target population was 250 senior managers and middle level managers from gambling and lottery companies. Simple random sampling technique was utilized to choose the respondents in sports betting companies. The study sample size was 154 managers. Primary data was gathered by the use of structured questionnaires. Quantitative data gathered was examined by use of descriptive statistics and inferential statistics and presented as percentages, means, standard deviations and frequencies. A multiple regression analysis was conducted to determine the effect of tax policy on organizational performance of gambling and lottery companies in Nairobi County, Kenya. The study found that perceived corporate tax had a negative significant relationship with organizational performance (β = -0.467, P=0.003), perceived withholding tax had a negative significant relationship with organizational performance (β = -0.455, P = 0.003) and perceived betting tax had a negative significant influence on organizational performance (β = -0.472, P = 0.002). The study was important to betting and lottery companies. The companies would comprehend the tax policy. They would be skilled to comply with the tax requirements. The government assured the companies comply with the tax policy through regular analysis. The study recommends that the government should consider striking a balance between revenue generation goals of the government and organizational goals of the gambling and lottery companies. The study recommends that another study should be conducted on challenges facing gambling and lottery companies in Kenya like regulations imposed on the firms, legislation and competition.
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    Tax behavior on growth of Micro, Small and Medium Enterprises: a case of butcheries in North of Nairobi Tax Region, Kenya
    (KESRA/Moi University, 2021) Chiira, Reuben Maina; Dr. Odunga, Robert; Dr. Koske, Naomi
    Despite the high level of resilience exhibited by the micro small and medium enterprise sector as evidenced by job creation abilities in a tough environment as well as significant contribution to gross domestic product, the businesses still face serious challenges that impede their growth. The firms experienced average decline of 4% in annual turnover between financial years 2018-2019. This study therefore sought to investigate the effect of tax behavior on growth of micro, small and medium enterprises: a case of butcheries in North of Nairobi tax region, Nairobi County. The specific objectives were to determine the effect of tax knowledge by taxpayers, tax compliance costs behaviour, and tax non-compliance cost behaviour on growth of micro, small and medium enterprises in North of Nairobi tax region, Nairobi County. The study was anchored on the theory of planned behaviour theory of economic entrepreneurship, and the economic deterrence theory. An explanatory design was employed. The target population for this research was 2500 licensed butcheries by Nairobi County Government in Kenya Revenue Authority tax region of North of Nairobi. The study sampled 344 butcheries using stratified random sampling. Primary data was collected using structured questionnaires. Data was analyzed by descriptive statistics (means and standard deviation), while inferential statistics (correlation and regression) helped to test the relationship between the study dependent and the independent variables. The regression results showed that tax knowledge by taxpayers (β=0.488, p=0.000) had a positive and significant effect on growth of micro, small and medium enterprises. The results further showed that tax compliance costs (β= -0.102, p=0.002) and tax non-compliance cost behavior (β= -0.223, p=0.000) have a negative and significant effect on growth of micro, small and medium enterprises. From the findings, the study concluded that it is important for micro, small and medium enterprises to employ employees that have knowledgeable on tax compliance matters. This will enhance their growth. The study further concluded that number of taxes and the amount of tax that micro, small and medium enterprises are required to pay to the government had greatly increased. In addition, the tax payment method is very clear to the micro, small and medium enterprises and this enables them to make frequent tax payments. The study recommended that micro, small and medium enterprises should invest in seeking tax knowledge and ensure that all their employees are equipped with the tax knowledge. This is because acquiring reasonable level of tax knowledge facilitates growth of their businesses. The government of Kenya needs to lower the compliance costs of the micro, small and medium enterprises. This is because high compliance costs diminish competitiveness of the country in terms of taxation attractiveness, public services which have become increasingly interested in ways to simplify their tax legislation systems. The government of Kenya also needs to lower the noncompliance costs of the micro, small and medium enterprises. This is because increase in tax compliance costs, denies the business persons the advantage to reap off economies of scale and thus little growth is envisioned.