2.2021

Permanent URI for this collection

http://10.150.1.119/handle/123456789/2619

Browse

Browsing 2.2021 by Subject "SME"

Now showing 1 - 2 of 2
  • Thumbnail Image
    Item
    Determinants of Value Added Tax Performance among Small and Medium Enterprises in Nakuru Central Business District-Kenya
    (KESRA/JKUAT - Unpublished research project, 2021) Sora, Jane Shaga
    Small and Medium Enterprises have always been a factor of concern among tax policy makers all over the world. On one hand, since they constitute the largest universe of taxpayers and on the other their importance in the collection is very small. Taxation of Small and Medium Enterprises is a burden they must bear to sustain their government since the government has certain activities for the benefits of Small and Medium Enterprises. The current research will seek to determine the factors affecting value added tax performance among Small and Medium Enterprises in Nakuru Central Business District. The dependent variable was Value Added Tax performance while the independent variable was tax literacy, cost of compliance and tax audits. The specific objectives were to determine the effect of tax literacy, compliance costs and tax audit on Value Added Tax performance in Nakuru Central Business District. The study was pegged on three theories namely; Contract theory, Transaction Cost Economics Theory and agency theory. The study used descriptive research design. The target population in this study comprised of 578 Small and Medium Enterprises in Nakuru Town registered in the department of trade where a sample of 236 respondents were selected using stratified random sampling. The primary data was collected by use of a questionnaire where the collected data was sorted, corded and fed into statistical package for social sciences after which the relevant descriptive statistics such as standard deviation, mean, variance, and mode output was generated along with correlation and regression analysis for subsequent model testing. The data was analyzed at 5% significant level and 95% confidence level. The descriptive findings show that several tax trainings conducted by Kenya Revenue Authority through workshops and seminars in Nakuru central business district has equipped Small and Medium Enterprises with basic understanding of tax laws. Also, the results show that Small and Medium Enterprises have an access to tax education through media advertisements, magazines and from the Kenya Revenue Authority website. However, concerning access to information on the aggregate taxes collected and how they are spent, the results show that Kenya Revenue Authority rarely share the information concerning collections and how they are spent. Also, regression analysis and correlation analysis established a positive and significant relationship between tax literacy and tax audit with value added tax performance. However, a negative and significant beta coefficient and person correlation coefficients were established between cost of compliance and value added tax performance. The study concludes that tax literacy, reducing cost of compliance and regular tax audit can help improve value added tax performance. The current study recommends that Kenya Revenue Authority need to establish ways of sharing information on value added tax performance and usage to the taxpayers. Lastly, similar studies can be done in other towns in Kenya to establish whether similar findings will be obtained. Also, similar study can be done in Nakuru but in a different sector like real estates and see if same findings will be obtained.
  • Thumbnail Image
    Item
    Effect of Taxation on the Performance of Small and Meduim Enterprises in Voi Town, Kenya
    (KESRA/JKUAT - Unpublished research project, 2020-07) Ngali, Jenta Itaka
    SMEs are faced with the problem of high tax rates, multiple taxation, complex tax regulations and lack of proper enlightenment or education about tax related issues. It was in this regard that the researcher sought to establish the effects of taxation on the performance of SMEs in Voi Town. The study was guided by the following objectives: To assess the effect of tax policies on performance of SMEs in Voi town, Kenya, to evaluate the effect of tax rates on performance of SMEs in Voi town, Kenya and to ascertain the effect of tax reforms on the performance of SMEs in Voi town, Kenya. The study will be of great value to the management of SMEs and formulation tax policies pertaining to KRA. To provide the basis of the study, the researcher relied on the following theories: ability to pay theory, economic theories and optimal theory of taxation. The study adopted a cross-sectional research design, where 130 SMEs of the town were targeted. The study used Yamen’s formulae to determine a sample of 98 SMEs which were stratified into various business categories. The study used structured questionnaires which were distributed to the management and owners of these SMEs. The returned questionnaires were analyzed using SPSS to establish the relationship between the study variables. The study relied on a response rate of 72.4% (71) for data analysis and findings. The analysis showed that there was a significant negative very weak relationship between tax policies and SMEs performance (β= -0.185; p= 0.030). Secondly, it was determined that there was a weak negative and significant relationship between tax rates and SMEs performance(β=-0.212; p=0.009). Finally, on the relationship between tax reforms and SMEs performance, a weak positive relationship between the two study variables (β=0.204; p=0.004). The study concluded that tax rates and tax policies has a significant negative effect on tax performance, while tax reforms has a significant positive effect on SMEs performance. The study recommended that tax regulations governing SMEs should be simplified in order to improve their growth and to make compliance easier for them.Further, tax administration should use current tax reform to reduce tax complexity with tax authorities which should focus and help taxpayer during filing taxes with returns information. Finally, tax administrators should improve their support services towards SMEs.