Browsing by Author "Nekesa, Marion"

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    Coordinated Border Management and Trade Facilitation at Namanga Border Post, Kenya
    (Kenya School of Revenue Administration, 2023-11) Moraa, Catherine Ondari; Nekesa, Marion
    Trade facilitation at the Namanga border post is currently facing a number of challenges that result into delays of clearance of goods across the Kenya -Tanzania border. The situation often encourages increased smuggling of goods as traders try to use shortcuts to avoid government agencies’ bureaucracies that always cause losses to several businesses due to delayed movement of commodities across the border. All these challenges are associated with disjointed coordination of trading by different agencies involved. The purpose of this study was to establish the effect of coordinated border management on trade facilitation in Kenya, focusing on Namanga one-stop border point. Specific objectives of the study included: to establish the effect of cooperation among border agencies, coordination between border agencies, border collaboration challenges between border agencies, coexistence among border agencies, and the effect of communication among border agencies on trade facilitation at the Namanga border point. New Trade Theory and Export Base Theory were used in the study. The study adopted causal research design and a target population of 140 staff of border control agencies at Namanga Border Point. Census was used to include all of them in the study where primary data was collected using a structured questionnaire and analyzed using descriptive (frequencies & percentages) and inferential(multiple linear regression) data analysis methods. The study’s key findings indicated that a unit increase in cooperation among border agencies would lead to a 0.153 increase in Trade facilitation at Namanga Border Post (β1=0.153, p=0.008<0.05); a unit increase in for Coordination of border agencies would lead to a 0.246 increase in Trade facilitation at Namanga Border Post (β2=0.246, p=0.014<0.05); a unit increase in Collaboration between border agencies would lead to a 0.123 increase in Trade facilitation at Namanga Border Post (β3=0.123, p=0.03<0.05); a unit increase in Coexistence among border agencies would lead to a 0.232 increase in Trade facilitation at Namanga Border Post (β4=0.232, p=0.001<0.05); a unit increase in cooperation among border agencies would lead to a 0.331 increase in Trade facilitation at Namanga Border Post β5=0.331, p=0.000<0.05). The study concluded that coordinated border management has a significant effect on trade facilitation at Namanga border post. The study recommended that there is need for the government and other key stakeholders to adopt international standards and tools of trade, such as SAFE Framework of Standards and performance of Time Release Study (TRS), that will help the identify bottlenecks and the border and address them efficiently. The study suggested that a comparative study should be carried out on the effect of coordinated border management on trade facilitation in at least two border points. A study should also be conducted on how the government is addressing challenges of coordinated border management to improve trade facilitation.
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    Effect of Digitalization Effectiveness on Turnover Tax Compliance among Textile Small and Medium Size Enterprises in Eastleigh, Nairobi County
    (ATCR Publishing, 2024-11-29) Abdi, Ahmed Mohamed; Nekesa, Marion; Kirui, Daniel K.
    Tax is an important stream of revenue for any government’s development projects in both developed and developing economies. The main purpose of this study was to determine the effect of digitalization effectiveness on turnover tax compliance among small and medium size enterprises in Eastleigh, Nairobi County. The specific objectives that guided the research were: to study the relationship between technological ease of use and turnover tax compliance; to establish the relationship between technology usefulness and turnover tax compliance and to examine the relationship between system security mechanism and turnover tax compliance among small and medium size textile enterprises. This study was grounded on Technology Acceptance Model and Unified theory of Acceptance and use of Technology. Descriptive research design was applied in this study. The target population was textile enterprises operating in Eastleigh Avenue. Stratified sampling technique was utilized since the population itself was stratified in nature. Yamane's formula was used to determine the sample size of 243 textile SMEs. Data was collected using questionnaires and analyzed descriptively. To establish the relationship between study variables correlations and regression analyses were carried out. The study findings revealed that regression coefficient for technological ease of use, technology usefulness and system security mechanisms had (β = .098,.311 and .129) had positive and significant relationship with turnover tax compliance. The study concludes that technology facilitates compliance by reducing user effort and increasing openness to new technologies. It recommends that the Kenya Revenue Authority (KRA) ensure their digital systems are user-friendly, reliable, and effective. Enhancing the online system's ease of use, reliability, and functionality could improve the efficiency and convenience of tax filing, fostering a positive user experience and greater compliance.
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    Effect of Tax Incentives on Financial Performance among Manufacturing Firms in Kenya (A Case of Industrial Area, Nairobi)
    (Kenya School of Revenue Administration, 2023-11-20) Kimeu Faith Mumbua; Nekesa, Marion
    Tax incentive is a strategy employed by governments world over to attract investments in varied sectors of their economies. The main objective of this study was to examine the effect of tax incentives on financial performance of manufacturing firms in Kenya, taking manufacturing firms in Nairobi industrial area as a case study for 10 years. The study was guided by the following specific objectives: to find out how capital allowance affect financial performance of manufacturing companies in Kenya, to establish the effect of allowable deductions on financial performance of manufacturing companies in Kenya and to investigate effects of investment deductions on financial performance of manufacturing companies in Kenya. The study adopted deterrent theory, ability to pay theory, and agency theory. The study employed a descriptive research design, using stratified sampling methods. The study’s target population was manufacturing companies in Kenya specifically in the Nairobi Industrial Area across all the categories as listed by the Kenya Association of Manufacturers directory as at 2022. The study collected secondary quantitative data which was analysed using descriptive statistics (means and standard deviations) and inferential statistics (correlation analysis) to determine the relationships between the independent variables and the dependent variable. Tables and figures were used to present the analysis output. The findings indicated that tax incentives had a significant positive effect on financial performance, as they reduced the cost of capital for manufacturing firms, promoted innovation and competition, and led to increased productivity and efficiency. Based on these findings, the study recommended that the Kenyan government should continue to provide tax incentives to manufacturing firms and tailor them to the specific needs of each firm, while also encouraging innovation and competition in the sector through support for research and development, technology transfer, and training programs. Manufacturing firms are also encouraged to take advantage of the tax incentives to invest in capital-intensive projects and acquire capital assets. However, there is a need to review the current tax laws to make the tax incentives more flexible and attractive to potential investors, and to consider increasing the amount of tax incentives to further reduce the cost of capital for manufacturing companies.
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    Impact of Indirect Tax Policy Reforms on Revenue Performance in Kenya
    (Kenya School of Revenue Administration, 2023-11) Kiara, Faith Gatwiri; Nekesa, 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 the 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 revenue-raising capacity for each tax category. This study aims to examine the impact of tax reforms with 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 the introduction of Withholding VAT the 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 the Kenya Revenue Authority and the 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 a 1% level of significance. VAT increased by 13.4 percent following the introduction of VAT withholding agents. This was equally significant at a 5a % 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 specific or ad valorem rates).
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    The Level of Deepening and Classification of Cryptocurrency Transactions and Taxation in Kenya
    (Kenya School of Revenue Administration, 18-08-21) Miriti, Nelly; Nekesa, Marion
    This study will seek to determine the level of deepening and classification of cryptocurrency transactions and taxation in Kenya. Cryptocurrencies present a non-tax revenue base for the revenue authority; however, no existing tax laws are guiding the treatment of cryptocurrencies. The main objective of this study will be to find out the effect of classifications of cryptocurrency transactions on the tax laws and regulation in Kenya. The study will employ a qualitative exploratory research design and will use primary data collected from tax consultants within the Kenya Revenue Authority and the big audit firms in Kenya by conducting interviews. The data collected from the interviews has been analyzed by the content analysis method. The study has established that there is a knowledge gap amongst the professionals on the use, accounting, and taxation of cryptocurrency. It is also evident that cryptocurrencies can be classified as intangible assets, inventory, or digital currency rather than money or cash. The circumstances and nature of the transactions affect the taxation of the income generated from cryptocurrency transactions. The study has also established there is need for regulation of cryptocurrencies in the aspects of accounting guidelines, taxation framework and legality of the activities associated with cryptocurrency.
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    The Effect of Service Quality on the adoption of KRA TIMS/eTIMS among Medium-Sized Enterprises Within Nairobi County
    (ATCR Publishing, 2024-11) Irungu, Irene; Nekesa, Marion
    The Kenyan government, through the Kenya Revenue Authority (KRA), has introduced the Tax Invoice Management System (TIMS) and its electronic counterpart (eTIMS) as part of its strategy to modernize tax collection and reduce instances of tax evasion. While the systems have been hailed as essential for enhancing tax compliance, the rate of adoption among medium-sized enterprises (SMEs) within Nairobi County remains inconsistent. The purpose of the study was to determine the effect of Service Quality on the Adoption of KRA TIMS/eTIMS Among Medium-Sized Enterprises within Nairobi County. This study employed a descriptive survey research design to gather quantitative data, ensuring a comprehensive understanding of the research problem. The target population consisted of 468 VAT-registered, medium-sized enterprises in Nairobi’s wholesale and retail sector, selected for their significant compliance gaps in VAT reporting. From this population, a sample size of 150 enterprises was determined using Yamane’s formula and adjusted for time and cost constraints. Purposive sampling method was used to select participants, ensuring representative and reliable data. Data collection utilized questionnaires. For data analysis, descriptive statistics (mean and standard deviation) and inferential statistics were employed. A multiple regression model was used to explore the relationship between variables. Results were presented through tables highlight key findings and trends. The study found a significant effect of service quality on KRA TIMS/eTIMS adoption, with an R-value of 0.848 and R² of 0.719. The regression coefficient was 0.551, with a t-value of 1.898 and p-value of 0.000, confirming statistical significance. The study concluded that factors such as the helpfulness and knowledge of KRA employees, along with the convenience of KRA's operating hours, significantly influence businesses’ decisions to embrace the system. The study recommended that KRA should continue improving its service quality to enhance the adoption of the TIMS/eTIMS system among medium-sized businesses. Furthermore, the study suggested that KRA should enhance the visual appeal of its offices and ensure it delivers on promises, as these factors contribute to a positive service experience.