3. 2021

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Browsing 3. 2021 by Subject "Exchange of information upon request"

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    Effects Of Exchange Of Information On Corporation Tax Performance At Kenya Revenue Authority
    (2021) Kamollo, Jully Adhiambo
    Corporation tax performance is an important government revenue source but has been inhibited by harmful tax practices from multinational companies who use tax havens to avoid or evade taxes from the country that income accrued. In the 2019/2020 financial year, KRA missed its target on account of the corporate tax it was to collect from MNCs by collecting corporate tax of Kshs. 167 billion from MNCs against a target of Kshs. 489 billion, which was attributed to tax evasion (KRA, 2020). KRA missed its target in the 2020/2021 financial year yet again since the corporation tax collected from MNCs was Kshs. 173 billion against a target of Kshs. 506 billion (KRA, 2021). This underperformance was as a result of illicit tax practices by multinational enterprises which can be remedied by using exchange of information as a performance enhancement tool. This study thus looked at the effect of exchange of information on corporate tax performance. The specific objectives of the study were to establish the effect of information exchange upon request on corporation tax performance, to investigate the effect of spontaneous exchange of information on corporation tax performance and to determine the effect of automatic exchange of information on corporation tax performance. The study was guided by three theories namely: the stakeholder theory, the information sharing theory and the economic deterrence theory. The study adopted an explanatory research design and used the regression analysis to explain the relationship between the variables. Simple random sampling was used to derive a sample of 60 respondents from a target population of 604 comprising of KRA officers seconded to the national treasury and those working at the large taxpayers’ office, investigations and enforcement department and the international taxation office. Primary data was collected through close-ended questionnaire, with a response rate of 81%. The data was analysed using descriptive and inferential statistics. The study findings indicated that the independent variables had a statistically positive significant effect on corporation tax performance: information exchange upon request (β1=0.298, p=0.000