4.2019

Permanent URI for this collection

http://10.150.1.119/handle/123456789/2621

Browse

Now showing 1 - 20 of 107

Determinants of income tax compliance among micro and small enterprises in kenya: a survey of Ngara market in Nairobi
(KESRA/JKUAT - Unpublished research project, 2019) Zau, Florence Manga
Taxes are an involuntary charge levied by the government on individual income, business profits and on transactions of goods and services. The purpose of the study was to analyze determinants of income tax compliance on MSEs. The main issue faced by tax authorities is that it has never been easy to persuade all taxpayers to comply with the regulations of the tax systems. Micro and Small enterprises are the majority of businesses in Kenya yet taxes collected from this sector are considerably low. In Kenya, the biggest block of taxpayers on the business sector are the Micro and Small Enterprises (MSEs) who according to IMF are 80 percent of taxpayers but remit only 5-10 percent of revenue. Their compliance rate is poor as most of the businesses are not registered and hence not paying taxes. This study aimed at assessing the tax compliance by MSE’s in the Ngara market of Nairobi Region. The study used a descriptive research design and owing to the large population a sample size of 150 traders was drawn from the target population of around 1500 traders. To ensure that various diverse categories of taxpayers and business entities were included in the survey, stratified sampling technique was adopted. Data was collected using structured questionnaires with both closed and open ended questions and analyzed using both descriptive and inferential statistics. The study determined that tax rate had a negative but statistically insignificant effect on the income tax compliance among MSEs in Ngara market of Nairobi Kenya. The study also established that knowledge of tax, interest and penalties, technology have a positive and statistically significant effect on income tax compliance among MSEs in Ngara market of Nairobi Kenya.
Determinants of Residential Rental Income Tax Compliance by Individual Landlords in Nairobi: Case of Dagoretti Division
(KESRA/JKUAT - Unpublished research project, 2019) Ndichu, Juliah Wachera
Past researchers have identified rental income tax compliance in Kenya to be below 50%. With the ever-growing national budget, rental income tax is seen as an area in which KRA can realize additional revenue to fill the revenue deficits. This study sought to establish the determinants of residential rental income tax compliance by individuals in Dagoretti division. The study employed descriptive research design where data was collected from a sample of 50 landlords using questionnaires. The data collected was analyzed using descriptive and inferential statistics with the help of Statistical Package for Social Sciences version 21 for evaluation of relation between dependent and independent variables. Multiple regression model was adopted. The findings of the study found a significant positive relationship between tax rate, tax knowledge, fines and penalties and cost of compliance. From the study findings it was recommended that through taxpayer’s education the taxpayers should be made to understand that filing the tax returns on a monthly does not amount to them paying higher taxes at the end of the year. Also KRA should cooperate with the ministry of education to introduce tax education in the curriculum, also there should be frequent tax education, and come up with taxpayer education programs with a wide coverage such as the media. In addition, there should be effective and timely communication of changes to the tax laws. Finally, the compliant taxpayers should see their non-compliant counterparts getting punished so that they would see that compliance is a good thing.
Determinants of residential rental income tax compliance by landlords in west of Nairobi district Kenya.
(KESRA/JKUAT - Unpublished research project, 2019) Njiru, Anne Rita Makena
Kenya still faces the challenge of low tax compliance in the real estate sector. Therefore, the primary goal of this research was to study factors determining collection of rental income taxes by Kenya Revenue Authority in west of Nairobi district. The specific objectives were to establish the effect of property owners’ perception on monthly residential rental income tax compliance, to find out the effect of tax knowledge on residential rental income tax compliance and finally to determine the effect of technology on residential rental income tax compliance. The theoretical framework was based on the theory of economic deterrence, theory of planned behavior and theory of technological acceptance. The study adopted a descriptive research design. The target population comprised of 19,000 residential property owners who are taxpayers in West of Nairobi district. The study selected a sample of 190 respondents using simple random sampling. Primary data was used where questionnaires were used for primary data collection and for secondary data was obtained from journals which represent academic research. Data analysis was done using descriptive statistical tools and the multiple regression method with the help of statistical package for social sciences (SPSS). The study finding indicated that taxpayer perception, tax knowledge and technology signficantly affects tax compliance in west of Nairobi district. The study concluded that taxpayers’ perception, tax knowledge and technology are significant determinants of residential rental income tax compliance by landlords in West of Nairobi district in Kenya. The study recommends that KRA and the government should investment more in technology and also create awareness on technology usage by tax payers to encourage residential rental income tax compliance.
Determinants of tax compliance by public transport savings and credit cooperative societies in Kenya:
(KESRA/JKUAT - Unpublished research project, 2019) Muraya, Lilian Wakarima
Tax is the main source of revenue in Kenya. Money incurred from taxation is used to provide public services and goods to the citizens. Indeed, taxation in the informal business sector including SMEs and public transport continue to face serious issues. This research project is aimed at studying the determinants of tax compliance by public transport savings and credit cooperative societies in Kenya. A cross sectional descriptive research design was agreed and population was made of 37 public transport Sacco’s in Nyeri County hence a census of the 37 office administrators of the public transport SACCO’s in Nyeri town was pursued and a questionnaire used for data collection. The questionnaires were administered to the office administrators by the researcher and there after collected after one week. The collected data was summarized using descriptive statistical tools comprising the mean and frequencies and the binary logistic regression used to examine the association between the tax compliance determinants and tax compliance by public transport SACCO’s. The study revealed that deterrence sanctions positively (B = 0.354) and significantly (P-value 0.001<0.05) affected public transport SACCOs tax compliance while taxpayers’ perception positively (B = 0.525) and insignificantly (P-value 0.503>0.05) affected public transport SACCOs in Nyeri County tax compliance. The study also revealed that tax knowledge had significantly (P-value 0.001<0.05) and positively (B = 1.016) affected tax compliance by public transport SACCOs in Nyeri County. Finally, the findings show a negative (B = -1.213) and significant (P-value 0.001<0.05) relationship between tax compliance costs and tax compliance by public transport SACCOs in Nyeri County. The multiple logistic regression results established that deterrence sanctions had a positive (B = 0.438) and significant (P value = 0.001<0.05) effect on tax compliance by public transport SACCOs while taxpayers’ perception had a positive (B = 0.348) but an insignificant (P value = 0.660>0.05) relationship with tax compliance by public transport SACCOs. The study also revealed that tax knowledge had a significant (P value = 0.009<0.05) and positive (B=1.464) effect on tax compliance by public transport SACCOs. The results further established a negative (B=-1.524) and significant (P value = 0.004<0.05) relationship between tax compliance costs and tax compliance by public transport SACCOs in Nyeri County. The results led to the conclusion that noncompliance sanctions, knowledge in taxation and costs associated with compliance mostly affected tax compliance by public transport SACCOs in Nyeri County. The study suggested that severe fines and penalties should be imposed on non-complaint public transport SACCOs and frequent tax audits should be carried out by the Kenyan tax authority. The study also suggest that KRA should ensure transparency and accountability during collection of taxes and that KRA should carry out tax training programs among public transport SACCOs to enhance tax knowledge and awareness as this would motivate SACCOs pay taxes and file tax returns.
Determinants of value added tax collection in Kenya. a case study of Kasarani constituency
(KESRA/JKUAT - Unpublished research project, 2019) Kasero, Alice Soila
The study aim to establish the factors affecting Value added tax compliance in among Small and medium enterprises in Kasarani Constituency. The study was guided by the following specific objectives:- to investigate the effect of costs of compliance on Value added tax compliance in among Small and medium enterprises in Kasarani Constituency, to find out the effect of penalties and interest on Value added tax compliance in among Small and medium enterprises in Kasarani Constituency, to determine the effect of level of tax knowledge on Value added tax compliance in among Small and medium enterprises in Kasarani Constituency to assess the effect of rates of tax on Value added tax compliance in among Small and medium enterprises in Kasarani Constituency. The study adopted descriptive research design. The study target population was 1600 Small and Medium taxpayers in Kasarani Constituency. The study sample size was 160. This study used primary data collected through questionnaires. A pre-test on a different sample was carried out to give a Cronbach’s alpha greater than 0.7 for all the variables as a rule of thumb. Data analysis was done by use of descriptive statistics and inferential statistics using Standard statistical techniques including Pearson correlation coefficient and regression analysis employed in the analysis. All the analysis was done using the statistical package for social sciences (SPSS Version.24). Analysis of variance (ANOVA) used to establish if there is a statistical significance between the observed and expected values with the Pearson Chi square giving the degree significance of the relations, hence establishing the hypotheses. The study found that Tax compliance cost, penalties and interest and tax rate significantly influences value added tax compliance. Based on study finding, this study recommends there is need for effective cost management when administering tax. Reduction in cost of compliance increases the number of registered traders which increase VAT Collection. The study further established that Tax rate encourage compliance with Value added tax compliance
Determinants of value added tax performance in Kenya: a case of west of Nairobi district
(KESRA/JKUAT - Unpublished research project, 2019) Awuor, Mercy
This research sought to find out the determinants of value added tax performance, a case of West of Nairobi District. Kenya Revenue Authority does not collect as much revenue from tax as it should as a result of low compliance. Value Added Taxpayers in particular have the potential of generating a lot of revenue for the government but this is not the case. This has posed a significant problem to the government and the country‟s growth as a whole. Therefore, the main objective of the study was to investigate the determinants of Value Added Tax performance in Kenya, a case of West of Nairobi District. The specific objectives were to determine the effect of cost, tax literacy and automation on VAT performance. This study was guided by 3 theories Economic deterrence theory, the ability to pay theory and theory of planned behavior. The target population was VAT taxpayers within West of Nairobi District. Given a target population of 44,944 registered taxpayers in West of Nairobi District, a sample size of 156 was picked as representative, to be the focus of this study. The study was based on a descriptive research design and simple random sampling technique will be adopted. Questionnaires were administered as data collection tools. The collected data was consequently analyzed using Statistical Package for Social Scientist software (SPSS) and the findings of the research presented using tables, figures and percentages to indicate trends among respondents, while regression analysis was used to analyze the data. Both descriptive statistics and inferential statistics was carried out with the help of the SPSS software. Based on research the study findings indicated that cost, tax literacy and automation signficantly affects VAT performance in west of Nairobi District.It is thus recommended that KRA should continue to pay more attention on cost, tax literacy and automation on Value Added Tax performance. This can be done by enhancing accountability in their systems. The study suggests similar study can be conducted using different practices to influence Value Added Tax performance in other districts.
Direct taxes on economic growth in Kenya.
(KESRA/JKUAT - Unpublished research project, 2019) Gitu, Loise Wanjiru
According to the World Bank Kenya, revenue grew by 13 percent in nominal terms in the year 2016/17 however; tax revenue grew by less than the nominal GDP of fifteen percent with tax to GDP ratio falling by seventeen percent to GDP marking the lowest level in a decade. The global lender attributed the decline to subdued growth in personal income tax and corporate income tax. Between July and September 2017, KRA missed its target of Kshs.89.6 billion by a fifth making it the highest deficit in the last 15 years. The current study attempted to investigate the impact of direct taxes on economic growth in Kenya. The research was guided by the following specific objectives: To determine the effect of personal income tax and economic growth in Kenya, to establish the effect of corporate tax and economic growth in Kenya and to assess the effect of capital gain tax and economic growth in Kenya. The research focused on three theoretical studies, which included; Keynesian theory, Equal sacrifice theory and Benefit theory. The Keynesian theory states that government mechanisms have a significant effect on economic growth. Government expenditure has a significant impact on taxation levels set which has an impact on savings and investments of individual and non-individual taxpayers. The Equal sacrifice theory advocates that income, wealth, and transaction should be taxed at a fixed percentage; that is, people who earn more should pay more taxes, but will not pay a higher rate of taxes. The benefit theory advocates that individuals should be taxed in proportion to the benefits they receive from the governments in public services and those people who receive the direct benefit of the government programs and projects out of the taxes paid should pay those taxes. The study adopted a descriptive research design with secondary data obtained on the various study variables from the KNBS from the year 2014 to 2018. The target population consisted of corporate income tax, personal income tax and capital gain tax. Data was analyzed using SPSS version 21 and was presented in tables for proficient presentation. The study showed that there was a positive significant relationship between corporate income tax and economic growth. Secondly, there was a positive significant relationship between personal income tax and economic growth. Thirdly, there was a negative insignificant relationship between capital gains tax and economic growth. The study recommends that KRA should be granted the right to access bank accounts of corporates with the help of Kenya Banking Association so as to be able to ascertain the authenticity of the taxable amount declared in a given financial year depending on the transactions conducted in the course of that time. With challenges in remission of personal income tax by employers to KRA especially by entities in the public sector the National Treasury through the CBK should withhold a given percentage of the tax for submission to KRA with the outstanding amount submitted by the respective entities. The capital gains tax rate ought to be increased from the current 5 percent which is the lowest in the East Africa region with the rates at 30 percent and 20 percent in Uganda and Tanzania respectively. This will put Kenya in a similar tax bracket as the rest of the economies in East Africa.
Effect of corporate social responsibility on Kenya Revenue Authority's revenue performance
(KESRA/JKUAT - Unpublished research project, 2019) Kabera, Caleb Karagu
The 21st century corporate environment has become more conscience focused to an extent that the need for business processes that are more ethical has increased. As such, there is more attention on the ethical behaviour of corporations, or corporate social responsibility (CSR), in both the private and public sectors. It emerges that CSR has of late been viewed as an important issue in industries and economic sectors all over the world, due to the increased attention to all the dimensions of a firm‟s activities and their relationships with stakeholders. In Kenya, the issue of ethics and corporate responsibility has received significant attention in order to address the rampant cases of corruption and misappropriation of government funds by various parastatals. The essence of conducting this study was to establish the effects CSR on revenue collection performance of Kenya Revenue Authority (KRA). To fulfil this topic, the study focused on three main objectives: To determine the effects of social responsibility on Kenya Revenue Authority‟s revenue performance. To determine the effects of economic responsibility on Kenya Revenue Authority‟s revenue performance, and to determine the effects of legal responsibility against corruption on Kenya Revenue Authority‟s revenue performance. The effects of CSR on KRA include: meeting the expectations of all stakeholders especially KRA staff and the taxpayers. The geographical scope of the study was KRA Mombasa North region. The focus was on KRA staff at Forodha house in Mombasa. Stratified random sampling technique was used to select a sample of 67 staff. In this study, data was collected using a questionnaire which was administered through pick and drop method. All the data was matched and coded to maintain employees‟ confidentiality. The collected data was analysed through SPSS version 22. Descriptive statistics in the form of pie charts and contingency tables was used to describe the data. Mean and standard deviations were used to describe the variables in the study while regression analysis was conducted to determine the effects CSR on revenue collection performance of Kenya Revenue Authority (KRA). Study findings revealed that involvement in community development, employee motivation and awareness against corruption have significant effect on revenue collection performance in Kenya Revenue Authority individually with t=0.426; p=0.003, t=0.023; p=.001 and t=5.749; p=0.000 respectively and collectively with R-square value of 0.667. From the findings, the study recommended that KRA device ways to be more visible at all times by increasing its CSR activities to cover the whole month. Additionally, the study recommended that firm‟s organization, corporate managers and other key stakeholders have to invest in robust innovation and technological systems that enhances performance which plays a critical part to the economy growth and development. The study suggests further study be carried out on other factors such as organization structure and technology that might have effect on KRA‟s performance in revenue collection in Mombasa North region.
Effect of debt management strategies on revenue collection in Kenya Revenue Authority
(KESRA/JKUAT - Unpublished research project, 2019) Sheikh, Ibrahim Umukaltuma
In Kenya, high tax debt limits the government’s capacity to raise revenue required for recurrent expenditure purposes and development. Besides the increasing needs for financial resources, tax compliance remains low. The KRA is currently faced with the challenge of enhancing its tax collection efforts, henceforth; the authority has adopted different debt management strategies such as tax penalties, tax collection by suit and tax waivers. Despite the authority’s efforts, the country’s tax debt has been increasing over the years. Thus, the current research sought to investigate the impact of debt management strategies on revenue collection in KRA. The specific objectives of the study were to determine the effect of tax penalties, tax collection by suit and tax waivers on revenue collection in KRA. The research used an explanatory research design. The target area of interest was all the 58 staff working in KRA, West of Nairobi station as well as 27 clients served in a day.Stratified random sampling technique was employed for a representative sample selection. The size of the sample was 42 respondents while the needed data for this research was retrieved from primary and secondary sources. The researcher obtained the data from KRA annual reports while the questionnaires were used to collect primary data. The research instrument generated quantitative and qualitative data. Qualitative data analysis was coded thematically for ease of understanding and presented in prose form. Descriptive and inferential statistics were adoptedfor analysis of quantitative data through the aid of statistical package for social sciences (SPSS version 22). Descriptive statistics comprised of mean, frequency distributions, standard deviation and percentages. Graphs and tables were used to present the findings for easy understanding and comparison purposes. The researcher made use of a correlation and regression models to deduce the existing association between the dependent and independent variables of study. The research showed that tax penalties significantly affected revenue collection in KRA. The also established that tax collection by suit significantly affected revenue collection in KRA. The results also revealed that tax waiver significantly affected revenue collection in KRA. The research recommends that KRA should develop user friendly revenue collection system, appropriate regulations and rules and increase human capital to enhance tax compliance which ultimately results to improvement in revenue collection. Moreover, the study found that the KRA should offer continuous onjob training, coaching and mentoring as well as outdoor training to enhance its staff competency skills consequently leading to improvement in revenue collection. Further, the research showed that the study recommends that the KRA should streamline waiver process, encourage the use of iTax platforms and adopt favorable tax waiving policies so as to encourage debt payment thus improving on revenue collection.
Effect of electronic commerce on tax collection by Kenya Revenue Authority in Mombasa County
(KESRA/JKUAT - Unpublished research project, 2019) Ayuma, Raphael Ongeri
Kenya’s economy is hanging on the balance in terms of its financial stability and economic freedom, thanks to the escalating levels of national debt exerting lots of pressure to the revenue authority to hit their revenue collection targets. The main challenge facing Kenya Revenue Authority is the efforts to persuade or rather force the taxpayers to comply with the existing tax regulations hence make them pay their due share of taxes. E-commerce sector has been growing tremendously over the years but there is no significant increase in revenue collected as most of them go unnoticed by the revenue authorities, yet they have a greater potential of generating lots of revenue. This has created many questions from the government and the relevant authorities thus the study sort to investigate effect of electronic commerce on tax collection by Kenya Revenue Authority in Mombasa County. The specific objectives guiding the study are; to evaluate the effect of business-to-business electronic commerce on tax collection by Kenya Revenue Authority in Mombasa County. To determine the effect of business to consumer electronic commerce on tax collection by Kenya Revenue Authority in Mombasa County. To assess the effect of consumer-to-consumer electronic commerce on tax collection by Kenya Revenue Authority in Mombasa County. The main theories include; ability to pay theory, cost of service theory and benefit received theory and descriptive cross-sectional study employed. The target population was 1457 Kenya Revenue Authority staff in Domestic Tax Department, as detailed in the Kenya Revenue Authority human resource records, 130 e-commerce businesses and 246 e-commerce consumers in Mombasa County as contained in the Communication Authority of Kenya database. A sample size of 94 selected using stratified random sampling and grouped into three strata consisting of Kenya Revenue Authority staff; e-commerce businesses; e-commerce consumers. Quantitative data collected using a structured questionnaire tabulated, coded and analyzed using Statistical Package for Social Sciences version 24. The significance of the regression was tested and the findings led to the conclusion that business-to-business, business to consumer, and consumer-to-consumer e-commerce positively influenced tax collection by Kenya Revenue Authority in Mombasa County. The p -values for all the variables were less than 0.05, hence statistically significant. The study recommended that investigation and subsequent improvement in the organizational policies within the revenue authority and embrace those that are in line with the new operational framework which are technology intensive. Training of revenue staff on transfer pricing issues especially the intangibles, and equip them with all methods of applying transfer pricing and application of the advanced technologies that are essential for the performance of their operations. Also simplification of legislation and provide for new ways and means of interpreting and determining the nature and characteristics of income especially from e-commerce transactions. The study made suggestion for further study on other variables such as consumer to business, business to government, and consumer to government e-commerce in Mombasa County and the other counties to draw concussive view on the study. In addition, a repetition of this study be conducted using a larger sample size, in other parts of the country and using a combination of other data-collecting instrument such as interviews and focus group discussions to help in counter checking the evidence provided.
Effect of electronic tax filing system on tax compliance by small and medium enterprises in Eldoret town.
(KESRA/JKUAT - Unpublished research project, 2019) Sakhasia, Phanice Nafuna
Low tax compliance by small and medium sized enterprises is a challenge for policy makers in many developing nations including Kenya. To address this problem, tax authorities introduced electronic tax filing systems. Therefore, the purpose of this study was to assess the effect of electronic tax filing system on tax compliances by SMEs in Eldoret town, Kenya. The following were the specific objectives of the study: to find the effect of iTAX training and support on tax compliance by SMEs, to establish the effect of iTAX cost of filling on TAX compliance by SMEs, to determine the effect of iTAX awareness on compliance by SMEs and to establish the effect of iTAX system quality on tax compliance by SMEs in Eldoret town. The study utilised a descriptive survey to target 365 SMEs in Eldoret town. A sample size of 191 SMEs was selected through stratified random sampling method. The research collected data through use of questionnaire. The data collected was analysed using descriptive and inferential statistics. All ethical considerations were followed. The study found out that there existed positive effect of iTAX use based on the following constructs; iTAX training and support (r=0.285), iTAX awareness (r=0.583) and iTAX systems quality (r=0.550) on compliance levels by SMEs in Eldoret town. All the three constructs effect were significant at 95% confidence level as revealed by correlation statistics. However, costs associated with iTAX use was found to have negative relationship (r=-0.015) which was not significant (p>0.05) with tax compliance by SMEs. In conclusions, the study observed that there existed a significant positive effect (p<0.05) between electronic tax filing system and tax compliance by small and medium enterprises in Eldoret town. The study recommends that regular training need to be conducted to cover the half that said they had not received any training on iTAX from KRA. To ensure SMEs understand the operations of iTAX, there is need for product of guides through brochures and pamphlets. On their part, KRA needs to ensure that iTAX system capacity is strengthened and regular system maintenance is done to ensure efficiency and effectiveness of taxation activities.
Effect of electronic tax system on rental income tax compliance by landlords in Eldoret Central Business District, Kenya
(KESRA/JKUAT - Unpublished research project, 2019) Terer, Brenda Chelangat
Taxation is a major source of revenue for most countries in the world. Therefore, governments and the revenue bodies continually put in place reforms and policies that seek to enhance revenue collection. In spite of many reforms by Kenya Revenue Authority, a lot of revenue still remains uncollected. This leads to failure by the authority to meet its annual revenue collection targets. The prime goal of this research was to determine the effect of electronic tax system on rental income tax compliance by landlords in Eldoret Central Business District. The specific objectives were to investigate the effect of electronic registration, to determine the effect of electronic filing and to find out the effect of electronic payment on rental income tax compliance by landlords in Eldoret central Business district. The study was guided by economic deterrence theory and Behavioral theory. An explanatory research design was adopted. The target population was 332 of which a sample of 181 was chosen using simple random sampling method. Primary data was collected using a questionnaire while secondary data was obtained from existing relevant sources of taxation. Regression analysis was conducted to analyze the collected data. The findings indicated a positive and significant relationship between electronic tax systems and rental income tax compliance by landlords in Eldoret Central Business District. It was established that the effect of electronic tax registration on rental income tax compliance by landlords in Eldoret Central Business District is positive and statistically significant. It was also established that the effect of electronic tax filing on rental income tax compliance by landlords in Eldoret Central Business District is positive and statistically significant. The findings also revealed that electronic payment systems have a positive and statistically significant effect on rental income tax compliance by landlords in Eldoret Central Business District. Based on the findings, the study recommends that Kenya Revenue Authority should create more awareness among the landlords in Eldoret Central Business District in order to enhance the understanding of using electronic tax systems which can in the long run improve rental income tax compliance thereby improving tax revenue. The study also recommends that Kenya Revenue Authority should hold workshops in Eldoret and train the landlords on the usage of electronic tax systems which can still improve rental income tax compliance thereby improving tax revenue in future.
Effect of information technology on tax compliance by Kenya Revenue Authority in Nairobi, Kenya
(KESRA/JKUAT - Unpublished research project, 2019) Olonde, Jeconia Omondi
The Kenyan government has had budgetary shortfall to finance both its capital and recurrent expenditure. With the big projects initiated by the government, it has forced the government to borrow externally. Since tax is the largest source of revenue for the government, the Kenya Revenue Authority has a huge challenge to increase its revenue collection. One of the reason for revenue collection shortfall by Kenya Revenue Authority can be attributed to low tax compliance and therefore the tax collector has been looking at ways to increase tax compliance of taxpayers. This has led to KRA to implement information technology so as to improve tax compliance. One of the information technology implemented is iTax, and others that KRA plans to implement is big data analytics and block chain technology. With the technology aspects being implemented or being in plan of implementation, the study sought to determine the effect of information technology by Kenya Revenue Authority on tax compliance in Nairobi, Kenya, and more so, the effect of iTax on tax compliance; the effect of big data analytics on tax compliance; and the effect of block chain technology on tax compliance. With the research objectives, the study analysed the theoretical and empirical literature, with the theories used being diffusion of innovations theory, technology acceptance model, and united theory of acceptance and use of technology. The concepts around the information technology were analysed and empirical research done to analyse the outcome and was used to compare with the findings. The study formulated a conceptual framework which operationalized the variables based on the technology acceptance model. The study also identified the gaps in the empirical research and how it will fill the gaps. The study employed a descriptive survey research design to get the good description of the phenomenon under study. The target population was all the I.T staff at the Kenya Revenue Authority who are based at The Times Towers who were 65 in number. Purposive sampling technique was used to identify respondents and they were 46 so as to be adequately representative. A questionnaire was the tool for data collection and was sent to the respondents through email. The data was thereafter analysed using descriptive statistics which include means and standard deviation, and inferential statistics which was regression analysis. The study findings indicated that in general, information technology has an effect on tax compliance i.e taxpayers’ registration, filing of returns, and income declaration. The study also found that iTax system has an effect on tax compliance to a very great extent and also well accepted by users, while data analytics and block chain technology have an effect on tax compliance to a great extent and also the acceptance of the technologies are well accepted. Regression analysis indicated that iTax system and big data analytics had significant effect on tax compliance while block chain technology had no significant effect on tax compliance. The study recommended that proper training needs to be done on new information technologies and also implement change management so as they can be effective. It also recommended that the government needs to create favourable policies to enable data privacy for users.
Effect of itax system on revenue collection among small and medium enterprises in Central Business Development
(KESRA/JKUAT - Unpublished research project, 2019) Ndumia, Edwin
The study aim to the general objective of this study was to find out the effect iTax system on revenue collection among SMEs in Central Business Development, Nairobi County. The study was guided by the following specific objectives: to determine the effect of E-registration on revenue collection among SMES in CBD, Nairobi County, establish the effect of E- filing on revenue collection among SMEs in Central Business Development, Nairobi County, assess the influence of E-payment on revenue collection among SMEs in Central Business Development, Nairobi County. The study adopted descriptive research design. The study target population was 1400 Small and Medium taxpayers in CBD Nairobi County. The study sample size was 140. This study used primary data collected through questionnaires. A pre-test on a different sample was carried out to give a Cronbach‘s alpha greater than 0.7 for all the variables as a rule of thumb. Data analysis was done by use of descriptive statistics and inferential statistics using Standard statistical techniques including Pearson correlation coefficient and regression analysis employed in the analysis. All the analysis was done using the statistical package for social sciences (SPSS Version.24). Analysis of variance (ANOVA) used to establish if there is a statistical significance between the observed and expected values with the Pearson Chi square giving the degree significance of the relations, hence establishing the hypotheses. The study found that e-registration, e-filling and e-payment significantly influences revenue collection. Based on study finding, this study recommends there is need for effective cost management when administering automation tax processes.
The effect of itax system on value added tax compliance among small taxpayers with hardware’s: a case of Starehe sub-county.
(KESRA/JKUAT - Unpublished research project, 2019) Waithaka, Simon G.
iTax refers to tax accounting system based on a web-enabled platform that pursues endeavor to simplify, secure and make compliance with tax laws convenient and cheap to the taxpayers and minimizes interaction between taxpayer who are the customer and the agency’ staff. The study sorts to investigate impact of iTax system on Value Added Tax Compliance among the Small and Medium Enterprises dealing hardware business in Starehe Sub-county. The specific objectives were; examine effects of tax Knowledge and Technical Skills on Value Added Tax Compliance, how compliance cost and how taxpayers’ perception affects Value Added Tax Compliance. The research employed descriptive research procedures and design targeting a population of all the Value Added Tax Registered Small and Medium Enterprises dealing in hardwires business in Starehe Sub-county which are approximated to be 737 registered Small and Medium Enterprises within the Starehe Sub-County. A minimum sample size of 74 respondents was chosen, representing 10% of the population dealing in the business of Starehe Sub-County. The stratified random sampling and simple random sampling method was employed and primary data was collected from the responds. Both descriptive analysis and inferential analysis (multiple regression, Correlation, one-way Analysis of Variance and Chi-square). The finding of this research shows that lack of taxpayer’s knowledge on taxation increases the cost of tax compliance thus negatively affecting VAT compliance thus taxpayers will create a kind of resentment against authorities with too complex tax systems. The research concludes that the level of education received by taxpayers is an important factor that contributes to their understanding of tax responsibilities. Compliance costs, in form of fees charged by tax consultants, are positively correlated with noncompliance behavior and thus negatively correlated with tax compliance behavior.
Effect of macroeconomic factors on tax revenue performance in Kenya.
(KESRA/JKUAT - Unpublished research project, 2019) Gisaina, Wilfred Magara
The “Big Four” development agenda: housing, security, affordable healthcare and manufacturing largely depends on government funding in order for this objectives to be met. Tax collection has to be taken into consideration since in Kenya like other economies it forms the largest source of revenue for the government. Despite Kenya Revenue Authority taking various measures in bid to improving tax collected, such efforts have been fruitless as far as meeting its revenue targets is concerned for the last decade. This poses a major concern on meeting future obligations caused by ever increasing deficits. Targets are set based on the projections of growth in economic activities as measured by macroeconomic indicators performance. The study sought to establish the effect of macroeconomic factors on the tax revenue in Kenya. The study was guided by an objective; to examine the effect of the selected macroeconomic factors on tax revenue performance in Kenya. The selected macro-economic factors included inflation rate, Government spending, and Gross Domestic Product. Causal research design was employed in determining the relationship between the dependent and independent variables. The main source of data was secondary data covering the period of 1991 to 2019. Tax revenue data was obtained from the Kenya Revenue Authority, the inflation rates were obtained from the records of the Central Bank of Kenya, annual GDP growth rates were retrieved from the annual publications of the Kenya National Bureau of Statistics while details of government spending were retrieved from the World Bank’s website. Data analysis was based on linear regression OLS estimation technique. The results indicated that GDP and government spending positively impacted tax revenue whereas, inflation was found to lower tax revenue as revealed by a negative correlation. All the variables were significant at 95% confidence level. Further research should be done on other macro-economic factors individually since the ones mentioned in the study are not the only factors affecting tax collection. The study focused on overall tax collection and not on specific type of taxes.
Effect of modes of taxpayer education on tax compliance among the small enterprises in Taita Taveta County, Kenya.
(KESRA/JKUAT - Unpublished research project, 2019) Nyambu, James Kitogho
Tax as a source of government revenue is a very critical strand in any state as it enables the government provide public goods and services to its citizens and undertake economic development projects. As a developing state, Kenya has a great share of the production sector being made up of Small and Medium Enterprises (SMEs) who in their nature can generate adequate revenue for the government, unfortunately, this is not so. Small and Medium Enterprises‟ non-compliance can be attributed to poor and often inadequate record keeping, weak financial and internal controls, absence of clear tax accounting guidelines, and more so inadequate knowledge and understanding of the tax rules and procedures among other reasons. The study aimed at assessing the effect of the various modes of Taxpayer education on tax compliance of Small enterprises in Taita Taveta County with focus on electronic mode of Taxpayer education, print media Taxpayer education, stakeholder engagement and customer care mode of Taxpayer education. The target population was the owners of small enterprises in Taita Taveta County. The target population was 900 small enterprises and the sample size for the study was set at 87 respondents. The study used primary data which was collected using pretested questionnaires to the owners of Small enterprises. Of the 87 questionnaires sent out, 79 were received back representing a response rate of 90%. Descriptive and inferential statistics were used in data analysis and interpretation. Presentation of the data and findings was done by way of tables. The study established that most businesses in Taita Taveta County are run by women and most businesses were in the nature of sole proprietorship. The study found that electronic mode of Taxpayer education, print media Taxpayer education, stakeholder engagement and customer care mode of Taxpayer education had statistical significance on Tax compliance with Customer care showing the strongest influence on Tax compliance with a Pearson correlation of 90.5%. Print media tax education showed a strong positive correlation of 78%, electronic taxpayer education showed a positive correlation of 65.6% with stakeholder engagement showing a correlation of 50.4% with tax compliance. The study further found out that majority of the respondents was not satisfied with the tax training offered by the Kenya Revenue Authority with some respondents stating to not knowing the existence of taxpayer education services offered by the revenue collection agency. Respondents suggested that Kenya Revenue Authority should be more proactive in its taxpayer education programmes by target taxpayers who are out of the main towns, have more frequent trainings and make follow ups after the trainings. The study recommends that the Kenya Revenue Authority should have a structured approach in its Taxpayer education aimed at reaching majority of the taxpayers who are not located in major towns. Further, the Ministry of Education should introduce taxpayers‟ education and try to include taxation course in the curriculum of all departments. This is because tax is one of the major sources of revenue for a government which is used in general to finance public expenditures and if tax education influences tax compliance attitude of tax payers, the tax course (similar to civics and ethics) must be provided as a common course for all.
Effect of online tax system on value added tax compliance among micro and small taxpayers in Nairobi county: a case study of Starehe sub-county.
(KESRA/JKUAT - Unpublished research project, 2019) Njoroge, Fridah Wangui
Globally, the tax administration process is changing rapidly. Tax authorities worldwide are under obligation to maintain a modernized and responsive tax administration system in-order to curb vices such as tax evasion and noncompliance. In view of this, the primary goal of this study was to establish the effect of online tax system on value added tax compliance among micro and small taxpayers in Starehe sub-county. The study was guided by the following specific objectives: to establish the effect of online registration on VAT compliance among micro and small taxpayers in Starehe sub-county, to determine the effect of online filing on VAT compliance among micro and small taxpayers in Starehe sub-county and to analyze the effect of online remittance on VAT compliance among micro and small taxpayers in Starehe sub-county. This study utilized compliance theories namely; the fiscal exchange theory, the economic deterrence theory, and the ability to pay theory. The study adopted descriptive research design. The target population was730 respondents. The study adopted a systematic sampling technique. A sample of 260 taxpayers was considered in this study. This study used primary data that was collected through questionnaires. Data analysis was done using descriptive statistics as well as inferential statistics with the help of the Statistical package for Social Scientists (SPSSVersion.24). The study findings indicated that online registration (B=0.141, p value=0.046), online filing (B=0.344, p value=0.028) and online remittance (B=0.428, p value=0.002) was also positively and significantly related to Tax compliance among micro and small taxpayers in Starehe Sub-County. The study therefore concluded that online tax system influence VAT compliance among micro and small taxpayers. Based on the findings the study recommends that KRA embraces all the iTax system components, revenue collection, accounting KRA should strengthen its tax registration and processing systems to enhance efficiency.
Effect of revenue automated duty system on excise tax performance in Kenya: a case of Nairobi north tax district.
(KESRA/JKUAT - Unpublished research project, 2019) Gachiku, Mary
Taxes play a major role in the development of a country. Kenya revenue authority (KRA) is mandated to collect taxes on behalf of the government of Kenya. To meet its goal, National Treasury sets target that KRA is expected to meet each year. However, over the past few years KRA experienced mixed fortunes in regards to meeting its targets.. To mitigate against this, KRA has been carrying out reforms through adoption of new systems that can improve efficiency in revenue collection, one of this system being Excisable Goods Management System (Excise duty system). Despite the adoption of these system, little emperical evidence exists on the effect of these system on tax revenue performance at KRA.This study sought to investigate the effect of Revenue automated duty system on Excisable tax performance in Kenya: a case of Nairobi North Tax District. Specifically, the study sought to determine the effect of electronic billing on Excise tax performance; establish effect of electronic monitoring system on excise tax performance and to establish the effect of E-filling on excise tax performance. The study was guided by two theories namely: theory of public expenditure, Adam Smith Canon of Taxation and optimal theory of taxation. Descriptive study design was employed in the study. The target population in this case comprised of the employees of the Kenya Revenue Authority and specifically employees in the DTD departments in Nairobi North tax district. The sample size of the study was 74 respondents. Data was collected from both primary and secondary sources.Questionnaire was used to collect primary data while secondary was collected from KRA website,journals and books that present academic research. Data was analyzed using SPSS and included both descriptive and inferential statistics. The study findings indicated that electronic billing signficantly affects excise tax performance.The study also showed that electronic monitoring system significatly affects excise tax performance. Finally, the findings revealed that electronic filling positively affects excise tax .The study results concluded that revenue automated system has an effect on excise tax performance at Nairobi north tax district. The study recommends the need for revenue authorities to automate their revenue systems to enhance excise tax performance.
Effect of revenue collection on service delivery: a case of Nairobi County.
(KESRA/JKUAT - Unpublished research project, 2019) Chumba, Gladys Jerotich
Revenue is income that a company receives from its normal business activities, it is normally derived from the sale of goods and services to customers. County governments bare the sole responsibility of delivering services to the community such as education, health, water, sanitation and garbage, transport and infrastructure.The purpose of the study was to investigate the effect of revenue collection on service delivery taking a case study of Nairobi County, Kenya. . The specific objectives were to determine the effect of sources of revenue, effect of reforms and modernization and effect of revenue enhancement plan on service delivery in Nairobi County. The study was guided by displacement theory, optimal theory taxation and the public finance theory. The study adopted a descriptive research design. The study targeted 230 taxpayers and 20 tax officers in Nairobi County. A sample of 115 taxpayers and 20 tax officers was considered. The study used primary data collected using structured questionnaires. Both primary and secondary data was used where questionnaires were employed to collect primary data while secondary data was obtained from Nairobi County budgetary reports and financial years reports and academic materials. Both descriptive statistics and inferential statistics was carried out with the help of the SPSS software. The findings indicated that sources of revenue, reforms and modernization, revenue enhancement plan signficantly affects service delivery in Nairobi County.Thus the study recommends that the management of Nairobi County should seal loop holes that make them lose tax they collect from various sources and this can be done by enhancing accountability in their systems. The Nairobi County management should also hold workshops for the county revenue officers to train them on reforms and modernization of operations in tax collection.