1.2021

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Effects of adoption of Electronic Tax Systems on tax revenue collection by Kenya Revenue Authority in Nairobi Region, Kenya
(KESRA/Moi University, 2020) Kalomba, Lucky Wambui; Dr. Nekesa, Marion; Dr. Bonuke, Ronald
Despite the tax modernization, there are concerns that the challenges that confront the Ministry of Finance and Kenya Revenue Authority today are not much different from the challenges that faced these revenue authorities before the electronic systems as they still fall short of the revenue targets. Therefore, the purpose of carrying out this study was to examine the effect of I-Tax System, Integrated Cargo management system (ICMS) and Excise Goods Management System (EGMS) on revenue collection by Kenya Revenue Authority. In review of literature, the study was anchored on the following theories: The Unified Theory of Acceptance and use of Technology, Diffusion of Innovation Theory and Technology Acceptance Model. The methodology of the study constituted the use of explanatory research design. The population of this study was generated from Customs Services, Domestic Taxes–Large Taxpayers and Domestic Taxes-Medium & Small Taxpayers with a total population of 700 staff and sample of 254 respondents was picked using stratified random sampling. The result of Multiple Regression Analysis showed that there was positive and significant relationship between I-Tax System and revenue collection at (β1) 0.274, t=4.348, p value <0.05). The analysis implied that a unit change in I-Tax System increases level of revenue collection by 0.274 units when holding other factors constant. The study findings also revealed that there was a positive and significant relationship between Integrated Cargo Management System and revenue collection at KRA (β2) 0.324, t=5.625, p value <0.05). The analysis implied that a unit change in Integrated Cargo Management System increases level of revenue collection by 0.324 units when holding other factors constant. The study further showed that there was a positive and significant relationship between Excise Goods Management System and revenue collection at KRA (β) 0.321, t=5.580, p value <0.05). The analysis implied that a unit change in Excise Goods Management System increases revenue collection by 0.321 units when holding other factors constant. The study recommends that the management of Kenya Revenue Authority should ensure that adequate public awareness is done to ensure that potential tax payers all register in the I-Tax, ICMS and EGMS systems. This will ensure that revenue collection increment is realized considering all the registered tax payers can be monitored if they are fulfilling their tax obligation Therefore, studies suggest the need to a similar topic but the case of reference should be on business community or traders in particular.
Factors influencing adoption of Alternative Dispute Resolution Mechanism in tax management amongst medium taxpayers in Nairobi County, Kenya
(KESRA/Moi University, 2020) Ngoiri, Mary Wanjiru; Dr. Nekesa, Marion; Dr. Sang, Jane
In Kenya, ADR was formally recognized with the promulgation of the Constitution in 2010 under Article 159(2). However, despite the benefits associated with ADR, its use in resolution of tax disputes is low, especially in areas outside Nairobi and Mombasa as indicated by the ICPAK (2017) report. Therefore, this study aims to determine the factors that influence the adoption of ADR mechanism in tax management in Kenya. The specific objectives of the study included: to assess the influence of perceived benefits on the adoption of ADR mechanisms in tax administration in Kenya; to examine the influence of perceived ease of use on the adoption of ADR mechanism in tax management in Kenya and; to examine the influence of ADR knowledge and awareness on the adoption of ADR mechanism in tax management in Kenya. The study was anchored on the conflict resolution theory, social influence theory, theory of reasoned action and unified theory of acceptance and use of technology. It employed explanatory research design and the target group was 2526 medium taxpayers registered by KRA, in Nairobi County. Simple random sampling technique was used to sample the population and the sample size constituted 385 medium taxpayers’ companies that were represented by their managers. Primary data was collected using questionnaires. Data analysis was conducted using regression analysis. Regression results Regression results (β=0.877, p=0.000) showed that perceived benefits of ADR had a positive and significant influence on adoption of ADR. Additionally, perceived ease of use of ADR had a positive and significant influence on adoption of ADR (β=0.277, p=0.000). The results also showed that perceived ease of use of ADR had a positive and significant (β=0.279, p=0.000) influence on adoption of ADR. The overall model was significant as supported by an F statistic of 167.568 and the reported p value (0.000<0.05). Based on the findings the study concluded that perceived benefit of ADR affects ADR adoption. A positive attitude towards ADR use can increase the rate of ADR adoption. Further, the study concluded that perceived ease of use of ADR. Further the study concluded that perceived ease of use of ADR affects the use of ADR. ADR is time effective, which increases the number of people adopting this method. The study also concluded that creating ADR knowledge increases ADR adoption. Therefore, investing in ADR awareness programs may positively influence ADR adoption. The study recommended that the government of Kenya should develop and implement a policy that makes it mandatory for all the companies to solve tax cases using the ADR mechanism in the first instance before proceeding to the court. Taxpayers should embrace ADR in resolution of tax disputes by allocating more resources and building capacity of their employees. Tax companies should invest more funds in research and educate their clients on the importance of adopting the ADR methods in tax dispute resolution.
Effect of Strategic Change Implementation on Revenue Collection by Customs Service Department of Kenya Revenue Authority
(Kenya School of Revenue Administration_Moi University, 2021) Muathe, Jemmimah Nthenya
Revenue collection is a management system that measures revenue. The process can be used to identify factors that drive revenue, measure the performance of these factors, and take action to maximize revenue. ICT adoption, customer relationship management, one-stop border post operations, and Staff Training can effectively be used for revenue collection. Despite the fact that KRA has put in place measures in its customs department to improve Revenue collection, it has continued to post a shortfall in revenue collection. The purpose of this study was to establish the effect of strategic change implementation on Revenue collection by the Customs Service Department of KRA. The study narrowed its research undertakings into four major specific objectives which are: to establish the effect of ICT adoption on Revenue collection by the Customs Service Department of KRA; to establish the effect of CRM on Revenue collection by the Customs Service Department of KRA, to establish the effect of one-stop border post on Revenue collection by Customs Service Department of KRA and to establish the effect of Staff Training on Revenue collection by Customs Service Department of KRA. The study employed the Rational Expectations Theory of Technology Adoption, Optimal Tax Theory, Theory of Equal Sacrifice, and Institutional Theory. The study area was the Customs Service Department of KRA. The target population was 547 and the sample size was 231 respondents. The researcher used a stratified random sampling technique to sample staff from the customs department of Mombasa and senior staff in the organization. The findings indicated that ICT adoption has a positive and significant influence on revenue performance (β1=0.125, p=0.011). It was also established that customer relationship management has a positive and significant influence on revenue performance (β2=0. 262, p=0.001). It was further established that one-stop boarder post has a positive and significant influence on revenue performance (β3=0.148, p=0.044). Finally, staff training was found to have a positive and significant influence on revenue performance (β4=0. 166, p=0.018). The results also showed an R square of 0. 255, which indicated that the independent variables explain 25.5% of variations in the dependent variable (Revenue collection). The study infers that strategic change implementation has influenced Revenue collection by the Customs Service Department of KRA. In particular, ICT adoption, CRM, and staff training were found to have an influence on Revenue collection by the Customs Service Department of KRA. CRM had the greatest influence on revenue collection, followed by ICT adoption, then staff training, and lastly OSBP operations. The implication of the findings is that CRM, ICT adoption, and staff training are critical in influencing revenue collection by the Customs Service Department of KRA. The study recommends that Kenya Revenue Authority should come up with a clear ICT policy aimed at improving revenue collection. Kenya Revenue Authority should come up with a clear policy on customer service. KRA should come up with a policy to make one-stop boarder post operations more effective. KRA should come up with a policy that makes Staff Training more frequent on emerging issues on revenue collection.
Effect of new technology adoption on logistics performance of transport operators at Inland Container Depot Nairobi
(KESRA/Moi University, 2021) Ndwiga, Caroline Murugi; Dr. Nekesa, Marion; Dr. Kimwolo, Andrew
Logistics companies suffer from inefficiency and insecurity in order to guarantee their profitability and growth. This has prompted integration of new technology into their operations through automation adopted by the customs department under Kenya Revenue Authority. This is to improve supply chain agility, power up operations, reduce cycle time, achieve higher efficiency and deliver products on time and reduce operations costs. From the selection of information, sorting of information, strengthening custom’s protection of consumers from counterfeit products to the real time tracking of cargo, it is becoming a requirement to use new technologies to meet customer service expectations and raise the productivity of the workforce. This study sought to investigate the effect of new technology adopted by customs on logistics performance in Nairobi. The specific objectives were to determine the effect of the adoption of the single window system, cargo scanner management system, and electronic cargo tracking system on logistics performance. Resource advantage theory of competition, task technology fit theory and instrumental theory of technology are the theories that guide the study. It adopted an explanatory research design. The target population were 300 customs officers and managers of logistic companies within Nairobi. A sample of 171 customs officers and logistics managers were selected using stratified random sampling technique. Data was collected using structured questionnaire. The descriptive and inferential statistical analysis techniques were employed by the study. To investigate the relationship between the independent variables and dependent variable, correlation and multiple regression analysis was used. Correlation analysis established the strength of linear association between the variables. On the other hand, a multiple linear regression model tested the significance of the influence of the independent variables on the dependent variable. Findings revealed that single window system (β=0.389, p=0.000), electronic cargo tracking management systems (β=0.268, p=0.000) and cargo scanner management solution (β=0.330, p=0.000) have a positive and significant effect on the logistics performance of transport operators. The study concluded that single window system, electronic cargo tracking management systems and cargo scanner management system contribute significantly to increase in logistics performance. The study recommended that customs department needs to constantly update its information technology infrastructure to incorporate the latest artificial intelligence software. This helps in speeding up the tracking systems and providing real time and reliable information. The study likewise recommends the adoption of e-government standards and in particular of standardized e-customs solutions as well as political and societal impact of e-customs policies. The customs department officials, logistics companies, and technological providers need to scale up their collaborative activities in advancing the application of single window system, electronic cargo tracking management systems and cargo scanner management system in supply chains for better performance of logistics.
Effect of Systems Automation on Customs Revenue Performance in Kenya
(Kenya School of Revenue Administration_Moi University, 2021) Omosa, Askah Moraa
Customs mandates are revenue collection, border protection, collection of international trade statistics, and trade facilitation (Ayuma, 2018). The collection of revenues has been used as the apex yardstick for measuring the performance of Kenya’s customs and border control department. In the year 2016/2017 and 2017/2018, KRA missed its target by 18.5 billion and 15 billion respectively. This shortfall in the collection created a deficit in the government project’s financing affecting the performance of customs revenues. This study established the factors that affect the revenue performance of the customs and border control department in Kenya in terms of actual revenue collection, trade facilitation, and protection of society. It focused on establishing the effect of Scanner technology, Cargo Tracking System, and Integrated Custom Management (ICMS)on the revenue performance of the customs and border control department in Kenya. The general objective was to investigate the effects of systems automation on customs revenue performance in Kenya. The study had three independent variables which were Scanner technology, Cargo Tracking System, and Integrated Custom Management (ICMS). This study was grounded in three theories: Technological Determinism Theory, General Systems theory, and International Trade theory. The study adopted the explanatory research design A population of 902 clearing and forwarding companies and customs officers was used out of which a sample of 227 respondents was selected, through the Taro Yamane sampling method. The study used both primary data by use of structured questionnaires and secondary data obtained from relevant materials which represent academic research, with the selected period being 2017 to 2019. Data was analyzed into descriptive statistics and inferential statistics by use of SPSS (20) and presented in tables, pie charts, and cross-tabulation. The data was equally tested for validity and reliability using the Cronbach Alpha Score as the test for reliability. Scanner technology (β1=0.451, p=0.00), Cargo Tracking Systems technology (β2=0.303, p=0.00), and ICMS technology (β3=0.204, p=0.00) were found to have a significant effect on customs revenue performance in Kenya with a P value of less than 0.05 for all variables. The results also revealed that scanner technology, cargo tracking system, and integrated customs management system caused a variation of 64.7% or (R2=0.652 and adjusted R2 =0.647) in revenue performance. The findings of the study established that custom revenue performance in Kenya increased significantly after the implementation of the systems. As a result, regional trade activities were intensified and greater border control was achieved. The Kenya Revenue Authority needs to ensure tighter enforcement measures other than the implementation of systems such as scanners, Cargo Tracking Systems, and ICMS. In conclusion, systems automation comes with costs attributable to ICT infrastructure, synchronization hitches, training, and security enhancements. Nevertheless, their implementation is important in achieving revenue growth and operational efficiencies. Regional synchronization of systems as with the Regional Cargo Tracking System allows data sharing and greater global competitiveness. Recommendations for further study were on the effects of the Integrated Customs Management System on the operational performance in East Africa. A further suggestion for future research was on the effects of Business Intelligence and Customs Oil Stocks Information Systems on customs performance.
Coordinated Border Management and trade facilitation at Namanga Border Post, Kenya
(KESRA/Moi University, 2021) Ondari, Catherine Moraa; Dr. Nekesa, Marion; Dr. Komen, Joyce
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
Effectiveness of Risk Management Strategies on Performance of the Customs and Border Control Department in Kenya
(Kenya School of Revenue Administration_Moi University, 2021) Metet, Marion Chepkorir
The recent increase in complexities and volumes of international trade, fueled by technological advances has revolutionized global trading practices. This has consequently significantly affected the way customs administrations carry out their responsibilities and organize their business operations. Specifically, the risk management process helps Customs administrations to focus on priorities and decisions on deploying limited resources to deal with the areas of highest risk. However, in Kenya, though custom risk management practices application is deemed to provide a wide range of benefits for customs and traders, the effect on the performance of customs and border control is not yet well established and this study aimed at shedding more light into this. The purpose of the study was to determine the effects of risk management strategies on firm performance: a case of the Customs and Border Control Department in Kenya. The specific research objectives were to determine the effect of cargo scanning, cargo tracking, customs intelligence, and integrated system on the performance of customs and border control in Kenya. The guiding theories were Risk Management Theory, Theory of Constraints, and Attribution Theory. The population of the study entailed employees working at the C&BC department at the border points and data was collected using both primary means. This was collected using questionnaires. The data collected was analyzed using descriptive including means, percentage frequency, and standard deviation as well as inferential analysis. The collected data were presented using tables and figures. From the correlation analysis, Cargo Scanning had a Pearson Correlation of 0.323 and a p-value of 0.000, Cargo Tracking System had a Pearson Correlation of 0.200 and a p-value of 0.001, Customs Intelligence had a Pearson Correlation of 0.14 and a p-value of 0.05 and Integrated System had a Pearson Correlation of 0.438 and a p-value of 0.000. The positive coefficient indicated by the variables implies that they have a positive effect on the performance of the customs department of KRA. In addition, from the regression analysis results, the coefficient of determination (Adjusted R2) was 0.415 implying that that the regression could explain up to 41.5 percent of the variation in the performance. The study, therefore, concludes that custom risk management has a significant effect on the performance of the customs department in Kenya. The study thus recommends that the KRA management should highly prioritize custom risk management practices among their key strategies. The study also recommends that the government formulate minimum risk management standards to be met by the customs department of KRA. KRA is also recommended to map customs and other administrations’ needs on changes to their current control procedures and IT equipment. The customs department is further recommended to set the broadest scope and the greatest content for risk management systems as far as their national resources allow.
Effectiveness of Risk Management Strategies on Performance of the Customs and Border Control Department in Kenya
(KESRA/Moi University, 2021) Metet, Marion Chepkorir; Dr. Gitonga, Doris; Dr. Kipsang, Stanely
The recent increase in complexities and volumes of international trade, fueled by technological advances have revolutionized global trading practices. This has consequently significantly affected the way customs administrations carry out their responsibilities and organize their business operations. Specifically, risk management process helps Customs administrations to focus on priorities and decisions on deploying limited resources to deal with the areas of highest risk. However, in Kenya, though custom risk management practices application is deemed to provide a wide range of benefits for customs and traders, the effect on the performance of customs and border control is not yet well established and this study aimed at shedding more light into this. The purpose of the study was to determine the effects of risk management strategies on firm performance: a case of Customs and Border Control Department in Kenya. The specific research objectives were to determine the effect of cargo scanning, cargo tracking, customs intelligence and integrated system on performance of customs and border control in Kenya. The guiding theories were Risk Management Theory, Theory of Constraints and Attribution Theory. The population of the study entailed employees working at the C&BC department at the border points and data was collected using both primary means. This was collected using questionnaires. The data collected was analyzed using descriptive including means, percentage frequency and standard deviation as well as inferential analysis. The collected data was presented using tables and figures. From the correlation analysis, Cargo Scanning had a Pearson Correlation of 0.323 and a p-value of 0.000, Cargo Tracking System had a Pearson Correlation of 0.200 and a p-value of 0.001, Customs Intelligence had a Pearson Correlation of 0.14 and a p-value of 0.05 and Integrated System had a Pearson Correlation of 0.438 and a p-value of 0.000. The positive coefficient indicated by the variables imply that they have a positive effect on the performance of the customs department of KRA. In addition, from the regression analysis results, the coefficient of determination (Adjusted R2) was 0.415 implying that that the regression could explain up to 41.5 percent of the variation in the performance. The study therefore concludes that custom risk management has significant effect on the performance of the customs department in Kenya. The study thus recommends that the KRA management should highly prioritize custom risk management practices among their key strategies. The study also recommends that the government to formulate minimum risk management standards to be met by the customs department of KRA. KRA is also recommended to map customs and other administrations’ needs on changes of their current control procedures and IT equipment. The custom department is further recommended to set the broadest scope and the greatest content for risk management systems as far as their national resources allow.
Effect of Coordination of Border Management Practices on Cargo Clearance Efficiency in Kenya; A Case of Key Border Stations in Kenya
(Kenya School of Revenue Administration_Moi University, 2021) Nganga, Edith Mutindi
Though the standard World Custom Organization clearance time is 3 days, the current clearance time in Kenya is 2 weeks or more which heightens the need for coordinated border management. Implementing coordinated border management strategies can reduce internal costs and inefficiencies, improve security, and increase their ability to facilitate trade and generate revenue at the border. However, despite the recognition of the importance of coordinated border management, the available studies are not conclusive on its effect on cargo clearance. The main objective of the study was to determine the effect of coordinated border management on cargo clearance in Kenya, a case of key border stations in Kenya. The specific objectives were to: establish the effect of coordinated flow of information between agencies, coordinated verification of goods and customs electronic procedures on cargo clearance at key border stations in Kenya. The study was anchored on three theories namely Theory of Constraints, Institutional Theory and System Theory. An explanatory research design was followed by the study targeting 445 employees and officials at four border stations in Kenya namely inland container depot in Nairobi and nonstop border posts at Namanga, Busia and Malaba. A sample size of 206 respondents was arrived at using Fischer formula. The study used primary data which was collected from the respondents using structured questionnaire and data analyzed using descriptive and inferential statistics. Statistical Package for Social Sciences computer software aided in the data analysis. Tables and graphs were used for presentation of findings. The study found out that Coordinated Flow of Information (r=0.118), Coordinated Verification of Goods (r=0.142) and Customs Electronic Procedures (r=0.287) have a positive effect on the cargo clearance at the border stations. The results of the regression analysis also showed that the CBM practices studied explain 53.1% of the variations in cargo clearance at the border stations (R2=0.531). From the hypothesis testing, Coordinated Flow of Information had a p value of 0.006, Coordinated Verification of Goods had a p value of 0.026 while Customs Electronic Procedures had a p value of 0.032 which shows that all the variables had a significant effect on cargo clearance (p<0.05). The study thus concludes that these CBM practices can severely enhance, hamper or interfere with the cargo clearing process at the border stations. The study recommends process reengineering at the border posts which will allow customs to streamline procedures, and as a result perform tactical and operational activities in a harmonized fashion. The study also recommends relevant policymakers and government agencies from partner states should work together to implement a more cost-effective CBM practices. The study further recommends that C&BC department of KRA should effectively integrate cargo clearance functions with ICT based systems through application of electronic cargo clearance methods.
Effect of adoption of Electronic Cargo Tracking System on Excise Revenue collection in Kenya: a case of Jomo Kenyatta International Airport
(KESRA/Moi University, 2021) Odago, Zedekiah Ochieng; Dr. Bonuke, Ronald; Dr. Nekesa, Marion
Over the years, Kenya Revenue Authority has implemented reforms and modernization programs geared towards positioning it as an efficient modern tax administrator. Despite the positive developments, KRA has continued to miss revenue targets partly attributed to taxpayer’s noncompliance and inefficiencies in revenue management systems. To mitigate lack of adequate revenues, Ministry of Finance has continuously revised up its fiscal deficit on a number of occasions. Electronic Cargo Tracking System is a modern computer-based assessment system that was introduced by the Kenya Revenue Authority Customs department, to monitor cargo and improve revenue collection. The study aimed to determine the effect of adoption of electronic cargo tracking system (ECTS) on excise revenue collection in Kenya - a case of Jomo Kenyatta International Airport (JKIA) as an entry and exit point. The study was guided by the following specific objectives; to determine how cargo monitoring affects excise revenue collection at JKIA in Kenya; to investigate whether Information Sharing affects excise revenue collection at JKIA in Kenya; to establish if cargo Security has effectively contributed to excise revenue collection at JKIA in Kenya. The study adopted explanatory research design. The target population comprised of 300 Customs and technical staff of Kenya Revenue Authority stationed at JKIA Customs department. Stratified random sampling was used to identify the population which was Customs and technical officers assigned to ECTS. Modern portfolio theory, Diffusion of innovation theory, Technological determinism theory, Infusion theory of technology and Technological acceptance model are the theoretical frameworks that guided the study. The study employed primary data collection by closed ended structured questionnaire using five-point Likert scale. The findings of the Multiple regression analysis revealed that Cargo Monitoring positively and significantly influenced Excise Revenue Collection (β1=0.221, p=0.003): Cargo Security positively and significantly influenced Excise Revenue Collection (β2=0.334, p=0.000); Information Sharing positively and significantly influenced Excise Revenue Collection (β2=0.357, p=0.000). Therefore, the study concluded that adoption of Electronic Cargo Tracking System (ECTS) has had significant effect on Excise Revenue Collection in Kenya, as shown by the increase in excise revenue from Sh. 80 billion in 2010 to 165 billion in 2018. From the results, the study recommends that Kenya Revenue Authority should fully strengthen Cargo Monitoring, Cargo Security and Information Sharing in order to realize additional Excise Revenue Collection at JKIA. The study suggests that future research can evaluate other factors that affect Excise Revenue Collection at JKIA.
Effects of Electronic Cargo Tracking System (ECTs) implementation on the performance of C&BC Department in Kenya
(Kenya School of Revenue Administration_Moi University, 2021) Mwelu, Mutinda Judy
The Customs and Border Control department in Kenya has continued to experience numerous challenges relating to the transportation of Cargo in transit including theft, delays, regulation, and compliance with regulations which contributed to a significant loss of revenue to the government. This necessitated the implementation of an electronic tracking system provider whose core mandate is capturing real-time locations of Cargo in transit. Though applying the system has presented an opportunity for ensuring cargo security and information sharing, the effect this system has on performance is yet to be fully established. The purpose of the study was to determine the effects of ECTs implementation on the performance of the C&BC department in Kenya. The specific objectives were to: find out the effect of ECT system infrastructure, ECT’s users, and ECT compatibility on the performance of the C&BC department in Kenya. An explanatory research approach guided the study. The population for this research comprised 440 respondents encompassing the Top KRA management, employees working at the Customs and Border Control Department, and Transit Monitoring Unit (TMU). Slovin’s formula (1960) was used in getting a sample size of 80 respondents who were selected using stratified random sampling. Data for the study was collected using primary means using structured questionnaires. The collected data were analyzed using descriptive and inferential statistics and presented in tables and figures. The study found out that the three aspects of ECT investigated including System Infrastructure (r=0.50, p=0.686), User Ability (r=0.554, p=0.00) and System Compatibility (r=0.398, p=0.001) had a positive effect on C&BC department performance. The study thus concludes that the sustainability, viability, and profitability of the C&BC department will be based on the efficiency in coordination of these aspects. The study recommends that the functionality of ECT should be enhanced to improve the transactions at the borders which leads to improved revenue collection at the borders while reducing transit goods violations. Kenya Revenue Authority is also recommended to recheck the need to enhance ECT reforms and enhance systems validations and integrity so as to enhance C&BC performance.
Effect of Customs Operations on the Growth of Cross-border Trade in Kenya
(Kenya School of Revenue Administration_Moi University, 2021) Sande, Shiphrah
In Kenya, the volume of cross-border trade has been declining. The country's current account deficit increased by 10.2% in Q1 2020, to Ksh 110.9 billion from Ksh 100.6 billion in Q1 2019. The goal of this research was to see how customs operations affected the growth of cross-border trade in Kenya. The study's main goal was to see how trade facilitation, border coordination management, and risk management affected cross border trade in Kenya. The study is guided by the gravity, monopolistic trade and new trade theories. The explanatory research design was considered in analyzing the effects of customs operations on cross border trade in Kenya. The target population of this study was 4117 customs administration officers working at Kenya revenue authority. The sample size for the research was 364 officials selected using stratified random sampling technique. Structured questionnaires were used to collect primary data. Descriptive and inferential statistics were used to analyze the data. To determine the effect of independent variables on the dependent variable, the researchers used multiple regression analysis. The findings revealed that trade facilitation had a positive and significant effect of growth of cross-border trade (β= 0.379, p=0.000). Border Coordination and Management had a positive and significant effect of growth of cross border trade (β= 0.313, p=0.000). Risk management had a positive and significant effect of growth of cross-border trade (β= 0.13, p=0.049). The conclusion of the study is that customs operations have significant contribution to growth of Cross-Border Trade in Kenya. The study further concluded that trade facilitation, border coordination and management and risk management positively and significantly influence growth of Cross-Border Trade in Kenya. The study recommended that management of Kenya Revenue Authority should ensure review of the aspects relating to trade facilitation including trade barriers, system integration, complexity of customs clearance procedures and automation. The management should also review aspects relating to border coordination & management such as cooperation of different agencies, policies to promote international cooperation and multilateral mechanisms, efficient and secured border coordination and management, strategic partnership and efficient automation of border processes and procedures. Further, the management should review aspects relating to risk management including global approach to customs risk management, identification of risks, risk analysis, and risk evaluation. Furthermore, scholars should consider investigating variables that would influence the relationship between electronic customs systems and growth of Cross-Border Trade such as government policy and technology adoption.
Effect of new technology adoption on logistics performance of transport operators at Inland Container Depot Nairobi
(Kenya School of Revenue Administration_Moi University, 2021) Ndwiga, Caroline Murugi
Logistics companies suffer from inefficiency and insecurity in order to guarantee their profitability and growth. This has prompted the integration of new technology into their operations through automation adopted by the customs department under Kenya Revenue Authority. This is to improve supply chain agility, power up operations, reduce cycle time, achieve higher efficiency and deliver products on time and reduce operations costs. From the selection of information, sorting of information, and strengthening customs protection of consumers from counterfeit products to the real-time tracking of cargo, it is becoming a requirement to use new technologies to meet customer service expectations and raise the productivity of the workforce. This study sought to investigate the effect of new technology adopted by customs on logistics performance in Nairobi. The specific objectives were to determine the effect of the adoption of the single window system, cargo scanner management system, and electronic cargo tracking system on logistics performance. Resource advantage theory of competition, task technology fit theory, and instrumental theory of technology are the theories that guide the study. It adopted an explanatory research design. The target population was 300 customs officers and managers of logistic companies within Nairobi. A sample of 171 customs officers and logistics managers was selected using a stratified random sampling technique. Data were collected using a structured questionnaire. Descriptive and inferential statistical analysis techniques were employed in the study. To investigate the relationship between the independent variables and dependent variable, correlation, and multiple regression analysis was used. Correlation analysis established the strength of linear association between the variables. On the other hand, a multiple linear regression model tested the significance of the influence of the independent variables on the dependent variable. Findings revealed that single window systems (β=0.389, p=0.000), electronic cargo tracking management systems (β=0.268, p=0.000), and cargo scanner management solutions (β=0.330, p=0.000) have a positive and significant effect on the logistics performance of transport operators. The study concluded that single window systems, electronic cargo tracking management systems, and cargo scanner management systems contribute significantly to an increase in logistics performance. The study recommended that the customs department needs constantly update its information technology infrastructure to incorporate the latest artificial intelligence software. This helps in speeding up the tracking systems and providing real-time and reliable information. The study likewise recommends the adoption of e-government standards and in particular of standardized e-customs solutions as well as the political and societal impact of e-customs policies. The customs department officials, logistics companies, and technology providers need to scale up their collaborative activities in advancing the application of single window systems, electronic cargo tracking management systems, and cargo scanner management systems in supply chains for better performance of logistics.
Determinants of Implementation of the East African Community Rules of Origin, 2015 in Kenya
(Kenya School of Revenue Administration_Moi University, 2021) Waweru, Jeremiah Gichuhi
The East African Community (EAC) has taken steps forward by implementing a free trade area, customs union, and a common market in its region. The implementation of the former requires the removal of all trade barriers in intra-regional trade. The purpose of this study was to establish the determinants influencing the implementation of the EAC RoO, in 2015 in Kenya. It was guided by three specific objectives namely; To establish the effect of the Structure of the EAC RoO on the implementation of RoO, 2015 in Kenya; To evaluate the effect of the capacity of customs personnel on the implementation of the EAC RoO, 2015 in Kenya; and to determine the effect of stakeholder awareness on the implementation of the EAC RoO, 2015 in Kenya. Customs union theory and the theory of economic integration were used as anchors to this study. The customs union theory focuses more on the welfare gains and losses that go after the structuring of the customs union while the theory of economic integration assumes perfect competition, and whose major concern is the location of production of different kinds of goods. The study adopted an explanatory research design and covered the following agencies involved in the implementation of Rules of Origin 2015 in Kenya; Kenya International Freight Forwarders and Warehouses’ Association (KIFFWA), Members of the Kenya Association of Manufacturers (KAM) and Kenya Revenue Authority. Staff in supervisory and management positions in the three agencies were the focus of the study. There are approximately 165 managers in the three agencies that were all studied since the study used census methodology. The Federation of East African Freight Forwarders Associations (FEAFFA) was used for pilot testing and thus was not included in the final data collection and analysis. It relied on primary data which was collected through a structured questionnaire. Quantitative data were analyzed using descriptive and inferential statistics and results were presented using figures and tables for easy understanding and interpretation. The study findings indicated that the structure of the EAC RoO, the capacity of customs officials, and stakeholder awareness were key determinants of the implementation of RoO, in 2015 in Kenya. Regression results showed that 53.9% of the variations in the implementation of the 2015 East African Community Rules of Origin in Kenya are jointly accounted for by the variations in the structure of the EAC RoO, the capacity of customs officials, and stakeholder awareness. The study concluded that there was improved implementation of EAC Rules of Origin, 2015in Kenya which was associated with the effectiveness of critical success factors hence successful implementation. It also concluded that the structure of the EAC RoO, the capacity of customs officials, and stakeholder awareness had a positive influence on the implementation of the EAC Rules of Origin, 2015in Kenya. The study recommends that there is a need to sensitize and empower users at border stations and other stakeholders about the changes in procedures that have been brought about by the implementation of Rules of Origin. The implementers; Kenya Customs also ought to set practical implementation objectives with regard to timeframes, the clarity of their action plans, and the allocation of resources both human and financial. It also recommends that stakeholders should be included in all pre-implementation and inception phases as well in the execution of agreed-upon strategies. This will increase the acceptability, and create a bridging social investment for the strategy implementation, as well as enrich the process with more ideas.
Effects of Single Window System on Trade Facilitation in Kenya. A case of Clearing and Forwarding Companies in Nairobi CBD
(Kenya School of Revenue Administration_Moi University, 2021) Koros, Osmond Kipkurui
In Kenya, challenges continue to be experienced amidst the advancement in trade among clearing and forwarding companies due to high transaction costs, long lead times, and too much bureaucracy as well as corruption. The concept of a Single Window System was thus developed to simplify the entire process and facilitate trade. Despite the clear benefits that SWS offers to both businesses and government agencies, the sovereign interests of the different individual agencies spark resistance to the new way of doing business. Further, the expected outcomes in trade facilitation among clearing and forwarding companies are yet to be realized with most firms reporting dismal performance. The study aimed to investigate the effect of SWS on trade facilitation in Kenya. The study was guided by the following specific objectives: to determine the effect of information sharing on trade facilitation in clearing and forwarding companies in Nairobi, to evaluate the effect of documentation on trade facilitation in clearing and forwarding companies in Nairobi and to determine the effect of electronic payment on trade facilitation in clearing and forwarding companies in Nairobi. The study was guided by The Theory of Customs Union, Behavioral Theory, and Technology Acceptance Model. An explanatory research design was adopted in collecting data from employees of chosen clearing and forwarding companies in the Nairobi area. The study's target population was 161 registered companies operating in Nairobi. A sample size of 114 firms was arrived at using Slovin’s formula which was chosen using purposeful sampling with one manager per firm being selected. All the independent variables were found to influence trade facilitation positively and significantly namely; Information Sharing (β1 = 0.275, P <0.05), Documentation (β2 = 0.227, P <0.05) and Electronic Payment (β3 = 0.213, P <0.05). This implies that an increase in these practices will result in improved trade facilitation. The findings from the regression analysis further obtained a coefficient of determination R square of 0.275 which implies that 27.5% of changes in trade facilitation are explained by the studied factors. The study, therefore, concludes that the Single Window system has a significant positive effect on trade facilitation in Kenya. The study recommends that appropriate mechanisms should be put in place in ensuring a seamless flow of information. The study also recommends that the government needs to look at the conflicting/ duplication roles of some regulatory agencies managing the clearance procedures during documentation. Further, the study recommends that the government of Kenya should continue developing regulations that enhance the legal and the development of electronic payment solutions. Proper awareness and marketing should also be done to the public to educate them on electronic payment systems benefits.
Effects of Electronic Cargo Tracking System (ECTs) implementation on the performance of C&BC Department in Kenya
(KESRA/Moi University, 2021) Mutinda, Judy Mwelu; Dr. Baimwera, Bernard; Dr. Limo, Patrick
The Custom and Border Control department in Kenya has continued to experience numerous challenges relating to transportation of Cargo in transit including theft, delays, regulation and compliance with regulations which contributed to significant loss of revenue to the government. This necessitated the implementation of an electronic tracking system providers whose core mandate is capturing real-time locations of Cargo in transit. Though applying the system has presented an opportunity for ensuring cargo security and information sharing, the effect this system has on performance is yet to be fully established. The purpose of the study was to determine the effects of ECTs implementation on the performance of C&BC department in Kenya. The specific objectives were to: find out the effect of ECT system infrastructure, ECT’s users and ECT compatibility on the performance of C&BC department in Kenya. An explanatory research approach guided the study. The population for this research comprised of 440 respondents encompassing the Top KRA management, employees working at the Customs and Border Control Department and Transit Monitoring Unit (TMU). Slovin’s formula (1960) was used in getting a sample size of 80 respondents who were selected using stratified random sampling. Data for the study was collected using primary means using structured questionnaires. The collected data were analyzed using descriptive and inferential statistics and presented in tables and figures. The study found out that the three aspects of ECT investigated including System Infrastructure (r=0.50, p=0.686), User Ability (r=0.554, p=0.00) and System Compatibility (r=0.398, p=0.001) had a positive effect on C&BC department performance. The study thus concludes that the sustainability, viability and profitability of C&BC department will be based on the efficiency in coordination of these aspects. The study recommends that the functionality of ECT should be enhanced to improve the transactions at the borders which leads to improved revenue collection at the borders while reducing transit goods violations. Kenya Revenue Authority is also recommended to recheck the need to enhance ECT reforms and enhance systems validations and integrity so as to enhance C&BC performance.
Effect of institutional factors on dry ports performance at Embakasi internal container depot, Kenya
(Kenya School of Revenue Administration_Moi University, 2021) Manwari, Saisi Dennis
Poor performance of dry ports that is characterized by delay has been experienced lately in Kenya. Delay of containers on container clearance has emerged and is evident at Embakasi Internal Container Depot which has indicated a long clearance period or overstay of received containers at the port for more than 10-12 days. The delay in clearing containers at the port is made worse by a lack of suitable container handling equipment, poor customs operations, inadequacy of port infrastructure, staff incompetence, and the size and capacity of the port. To reap the maximum benefit from dry ports, the efficient and effective performance of the dry ports is very crucial and to do that it is important to identify factors that affect the performance of dry ports. The main objective of this study was to determine the effect of institutional factors on the performance of Embakasi Internal Container Depot, a Kenyan Dry Port. The objectives of the study were: to determine the effect of port infrastructure on the performance of Embakasi Internal Container Depot, to evaluate the effect of human resources on the performance of Embakasi Internal Container Depot, to establish the effect of operations on the performance of Embakasi Internal Container Depot and to find out the effect on customers/stakeholder perception on the performance of Embakasi Internal Container Depot. This study adopted d explanatory research design. The study targeted a total population of 302. A sample size of 169 respondents was selected using Kumar’s formulae and the study adopted a stratified sampling design. Primary data was collected using structured questionnaires. Research instruments were validated by the university supervisors. Piloting was used to test the reliability of the research instruments. An overall correlation coefficient of 0.76 was obtained for all variables which exceeded the prescribed threshold of 0.7 meaning they were reliable. Data were collected using a structured questionnaire which was analyzed using both descriptive with the aid of SPSS version 24.0 and inferential statistics. The results of the study were presented in the form of frequency tables, charts, and graphs. From the regression findings, the predicted value of dry port performance at dry port performance holding infrastructure, human resources, operations, and customers’ perception to a constant zero would be 4.011. Infrastructure has a significant effect on dry port performance as indicated by β1= 0.754, p=0.013< 0.05. This implies that a unit increase in infrastructure would lead to an increase in dry port performance by 0.772 units. Human resources had a significant effect on dry port performance as indicated by β1= 0.772, p= 0.013< 0.05. This implies that a unit increase in human resources would lead to an increase in dry port performance by 0.772 units. Operations had a significant effect on employee performance as shown by β1= 0.661, p=0.014< 0.05. This implied that a unit increase in operations would lead to an increase in dry port performance by 0.661 units. Customer perception has a significant effect on dry port performance as indicated by β1= 0.642, p= 0.015< 0.05. This implied that a unit increase in Customer perception would lead to an increase in dry port performance by 0.642 units. At a 5% level of significance and 95% level of confidence, all the variables were significant (p<0.05). The study recommended that in order to improve the performance of Embakasi Internal Container Depot, the government should invest in port infrastructure. The study was limited to Embakasi Internal Container Depot and to enhance generalization, further studies should be carried out in other ports.
Effect of adoption of Electric Cargo Tracking System on Excise Revenue Collection in Kenya A case of Jomo Kenyatta International Airport
(Kenya School of Revenue Administration_Moi University, 2021) Adago, Zedekiah Ochieng
Over the years, Kenya Revenue Authority has implemented reforms and modernization programs geared towards positioning it as an efficient modern tax administrator. Despite the positive developments, KRA has continued to miss revenue targets partly attributed to taxpayer’s noncompliance and inefficiencies in revenue management systems. To mitigate lack of adequate revenues, Ministry of Finance has continuously revised up its fiscal deficit on a number of occasions. Electronic Cargo Tracking System is a modern computer-based assessment system that was introduced by the Kenya Revenue Authority Customs department, to monitor cargo and improve revenue collection. The study aimed to determine the effect of adoption of electronic cargo tracking system (ECTS) on excise revenue collection in Kenya - a case of Jomo Kenyatta International Airport (JKIA) as an entry and exit point. The study was guided by the following specific objectives; to determine how cargo monitoring affects excise revenue collection at JKIA in Kenya; to investigate whether Information Sharing affects excise revenue collection at JKIA in Kenya; to establish if cargo Security has effectively contributed to excise revenue collection at JKIA in Kenya. The study adopted explanatory research design. The target population comprised of 300 Customs and technical staff of Kenya Revenue Authority stationed at JKIA Customs department. Stratified random sampling was used to identify the population which was Customs and technical officers assigned to ECTS. Modern portfolio theory, Diffusion of innovation theory, Technological determinism theory, Infusion theory of technology and Technological acceptance model are the theoretical frameworks that guided the study. The study employed primary data collection by closed ended structured questionnaire using five-point Likert scale. The findings of the Multiple regression analysis revealed that Cargo Monitoring positively and significantly influenced Excise Revenue Collection (β1=0.221, p=0.003): Cargo Security positively and significantly influenced Excise Revenue Collection (β2=0.334, p=0.000); Information Sharing positively and significantly influenced Excise Revenue Collection (β2=0.357, p=0.000). Therefore, the study concluded that adoption of Electronic Cargo Tracking System (ECTS) has had significant effect on Excise Revenue Collection in Kenya, as shown by the increase in excise revenue from Sh. 80 billion in 2010 to 165 billion in 2018. From the results, the study recommends that Kenya Revenue Authority should fully strengthen Cargo Monitoring, Cargo Security and Information Sharing in order to realize additional Excise Revenue Collection at JKIA. The study suggests that future research can evaluate other factors that affect Excise Revenue Collection at JKIA.
Effects of Single Window System on Trade Facilitation in Kenya: a case of Clearing and Forwarding Companies in Nairobi CBD
(KESRA/Moi University, 2021) Koros, Osmon Kipkurui; Dr. Nekesa, Nekesa; Dr. Kirui, Daniel
In Kenya challenges continue to be experienced amidst the advancement in trade among clearing and forwarding companies due to high transaction costs, long lead times and too much bureaucracies as well as corruption. The concept of a Single Window System was thus developed to simplify the entire process and facilitate trade. Despite the clear benefits that SWS offers to both businesses and government agencies, the sovereign interests of the different individual agencies spark resistance to the new way of doing business. Further, the expected outcomes in trade facilitation among clearing and forwarding companies are yet to be realized with most firms reporting dismal performance. The study aimed to investigate the effect of SWS on trade facilitation in Kenya. The study was guided by the following specific objectives: to determine the effect of information sharing on trade facilitation in clearing and forwarding companies in Nairobi, to evaluate the effect of documentation on trade facilitation in clearing and forwarding companies in Nairobi and to determine the effect of electronic payment on trade facilitation in clearing and forwarding companies in Nairobi. The study was guided by The Theory of Customs Union, Behavioural Theory and Technology Acceptance Model. An explanatory research design was adopted in collecting data from employees of chosen clearing and forwarding companies in Nairobi area. The study target population was 161 registered companies operating in Nairobi. A sample size of 114 firms was arrived at using Slovin‟s formula which was chosen using purposeful sampling with one manager per firm being selected. All the independent variables were found to influence trade facilitation positively and significantly namely; Information Sharing (β1 = 0.275, P <0.05), Documentation (β2 = 0.227, P <0.05) and Electronic Payment (β3 = 0.213, P <0.05). This implies that an increase in these practices will result in improved trade facilitation. The findings from the regression analysis further obtained a coefficient of determination R square of 0.275 which implies that 27.5% of changes in the trade facilitation are explained by the studied factors. The study therefore concludes that Single Window system has a significant positive effect on trade facilitation in Kenya. The study recommends that appropriate mechanisms should be put in place in ensuring seamless flow of information. The study also recommends that the government needs to look at conflicting/ duplication roles of some regulatory agencies managing the clearance procedures during documentation. Further, the study recommends that the government of Kenya should continue developing regulations that enhance the legal and the development of electronic payment solutions. Proper awareness and marketing should also be done to the public to educate them on electronic payment systems benefits.
Effect of Non-Tariff Barriers on The Financial Performance Of Motor Vehicle Assemblers In Kenya
(Kenya School of Revenue Administration_Moi University, 2021) Mutwiri, Purity Ntinyari
Motor vehicle assemblers in Kenya have reported dismal performance over the past ten years contributing minimally to the economic growth of Kenya. Data from the Kenya Motor Industry Association has shown that the performance of motor vehicle assemblers is on a decline as indicated by the fall in the volume of sales reported annually. In the 2018/2019 financial year, Kenya’s motor vehicle assembly industry had a low operating capacity of 16% and an annual turnover of USD 600 million (including regional dealerships). Further with the collective action problems associated with NTBs, the performance of these firms is highly threatened. However, the available empirical literature provides contrasting and heterogeneous evidence, with most of the studies not being conclusive on the relationship that exists between Non-Tariff Barriers and financial performance. This study sought to determine the effect of NTBs on the financial performance of motor vehicle assemblers in Kenya. The specific objectives of the study were to determine the effects of import bans, import licensing, and quality control on the financial performance of motor vehicle assemblers in Kenya. The study was anchored on the theory of competitive advantage, upper echelons theory, and contingency theory. The study adopted the explanatory research design with the population being all four car assemblers in Kenya namely; Isuzu East Africa, Associated Vehicle Assemblers (AVA) Mombasa, Kenya Vehicle Manufacturers (KVM) Thika and Trans Africa Motors Mombasa. The target population was 880 departmental employees working in these firms. A sample size of 275 respondents was determined using Slovin’s formula and selected using stratified random sampling. Structured questionnaires were used to collect primary data. Data analysis was done using descriptive and inferential analysis. The findings revealed that jointly, non-tariff barriers explain 67% of the total variations in the financial performance of motor vehicle assemblers. Results also indicated import ban (β1 = .410, P = .000), import licensing (β2 = .319, P = .000), and quality control (β3= .198, P = .009) had a positive and significant effect on the financial performance of motor vehicle assemblers in Kenya. The study concluded that non-tariff barriers positively and significantly contribute to the financial performance of motor vehicle assemblers in Kenya. The study recommends that the government of Kenya should protect local motor vehicle assemblers by formulating regulations that promote local industries. It should initiate training programs aimed at equipping local motor vehicle assemblers with the necessary skills. The government should also review import licensing regulations to ensure that they support local motor vehicle assemblers. The government should further subsidize the cost of quality standards to enable the local motor vehicle assemblers to comply. It should also facilitate training programs aimed at equipping the local motor vehicle assemblers with the required quality control knowledge and skills.