3.2020

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Browsing 3.2020 by Author "Kalama, Alex Nguma"

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    Determinants of turnover compliance among small scale enterprises in Kilifi County
    (KESRA/JKUAT - Unpublished research project, 2020) Kalama, Alex Nguma
    The small business taxpayers who do not qualify for VAT pay the turnover tax. This tax was aimed at bringing businesses in the informal sector into the tax bracket. These businesses include small scale manufacturing firms and Jua Kali businesses, agricultural enterprises and transport industries. The general objective of the study was to investigate the determinants of turnover tax compliance among small scale enterprises in Kilifi County. The study focused on the following variables; taxation knowledge, tax compliance cost and taxpayer perception. The study was guided by the following theories; Fischer tax compliance model, the Allingham and Sandmo theory and Theory of planned behavior. This study adopted stratified sampling technique which was seen to be viable and more accurate given the target population. The target population comprised of 252 registered SSEs in Kilifi County from different sectors in Kilifi County. A pilot study was undertaken on 10 of the respondents to test the reliability and validity of the questionnaire. Primary data was collected using questionnaires. Quantitative data was analyzed using SPSS version 25. Descriptive analysis measures such as frequency, percentage, mean and standard deviation was used in data interpretation. Regression analysis was used to examine the effects of the independent variables; taxation knowledge, tax compliance cost and taxpayer perception and turnover tax compliance (the dependent variable). The R2 analysis was used to measure the goodness of fit of the model being assessed. Correlation analysis was used to determine the strength of relationship between the variables. The study found out that there was a positive and significant relationship between taxation knowledge and turnover tax compliance. Further, the study found out that there was a positive and significant relationship between tax compliance cost and turnover tax compliance. Lastly, the study found out that there was a positive and significant relationship between taxpayer perception and turnover tax compliance. Based on the findings, the study concluded that taxation knowledge, tax compliance cost and taxpayer perception have a positive and significant effect on turnover tax compliance. The study recommends that continuous tax education programmes and effective monitoring mechanisms must be taken into account by tax authorities to ascertain that taxpayers have a good and reasonable knowledge and understanding of tax matters. Further, in response to tax compliance costs, the government should endeavor to implement tax policies in the form of concessions that produce favorable outcomes for the SSEs. Lastly, there is need for a more simplified tax system since this will increase the perception of fairness on tax system and ultimately fosters tax compliance.