4. 2020

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http://10.150.1.119/handle/123456789/2617

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Browsing 4. 2020 by Author "Nekesa, Dr. Marion"

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    Impact of Indirect Tax Policy Reforms on Revenue Performance in Kenya
    (KESRA/Moi University, 2020) Kiara, Faith Gatwiri; Saina, Dr. Ernest; Nekesa, Dr. Marion
    The largest source of government revenue in Kenya is taxation. Domestic revenue mobilization is a key priority for providing governments with funds to deliver public services, for sustainable development agendas and investing in development. Tax and non-tax revenue are critical components of domestic resource mobilization. Over the years, there have been major changes in tax systems of various countries including Kenya. The motivation for these reforms has varied from country to country. For many developing countries, the impending fiscal crisis has provided the need for immediate tax reforms to enhance revenues. Kenya has undertaken massive tax reforms since the late 1980s under the Tax Modernization Programme. The significance of Indirect taxes over direct taxes as a means of raising government revenue, has gained momentum and is viewed as more favorable for investment and growth. Little is known about the performance of the reforms in terms of its revenue raising capacity for each tax category. This study aims to examine the impact of tax reforms in respect to pre- and post- reform periods and the factors underlying the observed trends of indirect taxes as one of the revenue sources that is not fully utilized. The objectives of the study were to establish the effects of introduction of Withholding VAT agents, Introduction of EGMS and switching the tax system from hybrid to a uniform specific or ad valorem Excise tax regime on revenue collection in Kenya. Annual secondary data spanning the period 2010-2019 was used in the analysis. The source of the data was mainly Kenya Revenue Authority and Kenya National Bureau of Statistics. Impact evaluation techniques (regression discontinuity and difference-in-difference) also known as quasi panel analysis techniques were used in the analysis. Stata software was employed in the analysis. From the difference-in-difference model, the analysis reveals that the introduction of EGMS led to an increase in excise revenue by 81.2%. This was significant at 1% level of significance. VAT increased by 13.4 per cent following the introduction of VAT withholding agents. This was equally significant at 5% level of significance. These findings are expected to shape policy direction that is aimed at enhancing domestic revenue mobilization. Based on the findings, the study recommends that the Commissioner of Domestic taxes should map all Medium Taxpayers (MTO) based on risk assessment and enroll additional taxpayers who can serve as potential VAT withholding agents. Further, the study recommends the broadening of the scope of goods covered under the EGMS system, and amendment of the Excise duty act to revert to the hybrid system (Higher of specific or ad valorem rates).
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    Technology Acceptance and Tax Compliance among Hotels in Taita Taveta County, Kenya
    (KESRA/Moi University, 2020) Nyandieka, Joash Omariba; Nekesa, Dr. Marion; Koske, Dr. Naomi
    Tax is the main source of Government revenue accounting for over 80% of the total revenue. Due to this, the Kenya revenue authority has over time tried to ensure total tax compliance by coming up with new technological systems moving from integrated tax management system in 2014 to the current i-tax system for tax registration, filing of tax returns and payment of tax due by tax payers. Even with the advancement in technology and making e-filing compulsory, the Kenya Revenue Authority is yet to achieve full tax compliance. This is manifest in failure by the Kenya Revenue Authority to meet its targets by an average of 10% between year 2014 to year 2018. This study was conducted to establish the relationship between technology acceptance and tax compliance for hotel sector in Taita Taveta County. The specific objectives of the study were to establish relationship between Perceived ease of use and tax compliance for hotel sector in Taita Taveta County, to establish relationship between perceived usefulness and tax compliance for hotel sector in Taita Taveta County and to establish relationship between perceived risk of use and tax compliance for hotel sector in Taita Taveta County. The study was guided by the following four theories: deterrence theory, behavioral theory, theory of technology acceptance and diffusion of innovations theory. The study targeted hotel managers and adopted explanatory research design. A pilot study was conducted in Kinango Sub-county of Kwale County to test the validity and reliability of research instruments that were used for the study. The study collected primary data from a sample of 71 hotel managers selected through simple random sampling from a population of 240 hotels. Data was tested for validity and reliability and analyzed using descriptive and inferential statistics. The adjusted R2 of the regression model was 0.598. The findings indicated that perceived usefulness had a positive and significant relationship with tax compliance (β=1.175, p=0.000). Perceived ease of use had a positive and significant relationship with tax compliance (β=0.432, p=0.027). Perceived risk of use had a negative and significant relationship with tax compliance (β= -0.915, p=0.000). The study concluded that there was a significant relationship between technology acceptance and tax compliance. Based on the findings, the study recommended that management of the hotels in Taita Taveta should educate their employees on the importance and usefulness of using technology. They should create an environment that allows employees to accept technology such as investing in the best information technology infrastructure. The management should also invest in training their employees on information technology skills. This will make it easy for employees to adopt and use tax information technology systems. Further, the management should find ways of eliminating possible risks associated with use of technology including financial risks, privacy risk and performance risk. The government should also put measures and policies in place that protect users of electronic tax systems such as i- tax.