1. Tax Administration

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Automation Activities, Capacity Building and Revenue Collection Performance at Kenya Revenue Authority
(Kenya School of Revenue Administration_Moi University, 2020) Nthenge, Miriam
The Kenya Revenue Authority has over the years failed to meet its revenue collection target. This has been associated with the systems that are still operating manually in the tax collection process. This study's general objective was to examine the role of automation activities and capacity building on revenue collection performance in the Kenya Revenue Authority. The specific objectives were: to examine the role of process automation on performance in revenue collection performance at KRA; to assess the role of capacity building on the collection of revenue at KRA; and to determine the moderating effect of capacity building on the relationship between Process automation and revenue collection performance. The research was guided by the theory of public expenditure, technological determinism, and social determinism. Explanatory research design was employed. A sample of 384 employees working in the department of Domestic Taxes and Customs and Border Control Department were selected using a systematic sampling technique from a target population of 4108 employees working in the two departments. Questionnaires were used to collect primary data. Descriptive and inferential statistics were employed in data analysis. Descriptive statistics included means and standard deviations to describe the characteristics of the variables. Inferential statistics included correlation and regression analysis, which tested the relationship between variables. The study adopted Hierarchical regression model. The findings indicate that process automation (β = .618, p = 0.000, R2.441, ΔR2.374) and capacity building (β = .374, p= 0.000, R2.540, ΔR2.099) significantly influence revenue collection performance. In addition, capacity building moderates the relationship between process automation and revenue collection performance (β= -.098, p = 0.034, R2.547, ΔR2.006). This information provides practical solutions on process automation to KRA management as results of the study have shown a positive notable effect of process automation on revenue collection performance and therefore the management should ensure that the systems are improved continuously so as to match with the current technological situation. The study also provides practical solutions on capacity building to KRA management, findings have shown a positive significant effect of capacity building on revenue collection performance and therefore the management should invest more in building the capacity of its staff. KRA policymakers should develop policies on training programs such as ITAX, ICMS, and EGMS to enhance employee performance and improve productivity.
Capital allowances and growth of listed manufacturing firms in Kenya
(KESRA/JKUAT - Unpublished research project, 2020) Syuki, Winfred Makaa
Manufacturing in Kenya has been on the decline for a considerable period with its contribution to Gross Domestic Product stagnating at 10 % from the 1960’s. According to the Government of Kenya, the manufacturing sector has high, yet untapped potential to contribute to employment and Gross Domestic Product growth. Generally, the manufacturing sectors’ average growth percentage has continued to stagnate at three to four per cent over the years. The performance of the manufacturing sector is affected by several factors one of them been the high cost of doing business. Excessive taxation in the form of high tax rate, double and multiple taxations are some of the challenges facing manufacturing industries. To mitigate this challenge, the government has advanced various tax incentives to the manufacturing sector. However, despite the various tax incentives being made towards these firms, their effect on their performance had not been investigated. Hence, this study sought to fill this gap. Therefore, the main aim of this study was to assess tax incentives and their effect on the growth of selected manufacturing firms in Kenya. Specifically, the study sought to; examine the effect of capital allowance on growth of listed manufacturing firms in Kenya. The study employed longitudinal design to determine the effect of capital allowance tax incentive on performance of listed manufacturing firms in Kenya. The target population for the study was 13 manufacturing firms listed at the Nairobi Securities Exchange in Kenya during the years 2012 to 2018. The study adopted a census design since the entire population was considered. The study measured the entire target population and a census was carried out to systematically acquire and record information regarding secondary data on company boards for each of the thirteen listed firms. The study used secondary data sourced from the listed firms’ published annual reports and statistics. Secondary data was retrieved from manufacturing firms’ websites, Nairobi Securities Exchange websites, Capital Markets Authority Library and Kenyan Investors website. The study utilized both descriptive and inferential statistics using Standard statistical techniques including Pearson correlation coefficient and regression analysis was employed in the analysis. The study estimated a Panel Data Regression Model. All the analysis was done using the statistical package for social sciences (SPSS Version.24). Analysis of variance (ANOVA) will be 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 research questions. In multivariate analysis, multiple regression analysis models were used to determine the type of relationship that existed between independent and dependent variables. From the findings, the study found that there was a strong positive correlation between the listed manufacturing firms in Kenya and W&T. The study further reveals that there was a negative relationship between ID and IBD and growth of listed manufacturing firms in Kenya. Based on the study findings, the study concluded that, capital allowance incentives affected the growth of selected manufacturing firms in Kenya positively. The study also concluded that various tax incentives needed to be made sustainable in order to ensure consistency in the performance of the firms.
The Causal Effect Between Tax Revenue And Economic Growth In Kenya
(2021) Kimani, Francis Kamau
The rapid-sporadic growth in government expenditure in Kenya has triggered concerns among policy makers on the repercussion of such growth on tax collection and the effect on the long run economic growth. The study sought to explore the relationship between tax revenue and economic growth in Kenya. The specific objectives were to; establish the causal effect between PAYE, corporation tax, value added tax, and excise duty on economic growth in Kenya. The study was anchored on the dynamic theory of public spending, taxation, and debt, the benefit theory, ability to pay theory, Neo-classical theory of growth and endogenous growth theory. The causal research design was adopted in the study. The study used secondary data that was obtained from the Central Bank of Kenya and the Kenya National Bureau of Statistics for the period 1989 to 2019. Time series analysis technique was adopted to determine the relationship between tax revenue and economic growth. The findings revealed that independently (β=1.198204, P=0.0011) and jointly (β=21.81471, P=0.0416), PAYEE had a positive and significant relationship with economic growth. Results also indicated that independently ((β =1.180804, P=0.0008) and jointly (β=22.50137, P=0.0339), corporation tax had a positive and significant relationship with economic growth. Results further revealed that independently, value-added tax had a positive and significant relationship with economic growth in Kenya (β =2.823958, P=0.0011). In addition, the findings showed that independently, excise duty had a positive and significant relationship with economic growth in Kenya (β =2.423642, P=0.0040). The study concluded that tax revenue contributes significantly towards enhancing economic growth in Kenya. The study recommendation is that the government of Kenya should strengthen tax policies, which is likely to increase revenue collection. The study also recommends that the government of Kenya should make structural adjustments to value-added tax and excise duty related policies, to ensure that there is adequate collection of taxes from these channels since there are less inconvenient and burdensome to the taxpayer since they are incorporated on the price of commodities and are not paid in lump sum like direct taxes and the taxpayer may not feel the burden of the tax since the obligation to collect and remit is placed on third parties. Further, consumption taxes (VAT & Excise tax) have a wider tax base which is paramount in ensuring equitable distribution of the tax burden on the target population.
Challenges Facing Taxation of the Informal Sector in Kenya: Case Study of Nairobi County
(KESRA/JKUAT - Unpublished research project, 2018) Memu, Pamela Kitinga
The large number of potential taxpayers in the informal sector, and the difficulties of monitoring “hidden” entrepreneurs and small-scale firms, can give rise to serious revenue collection costs for tax authorities in developing countries. At the same time, the revenue potential of taxpayers in the informal sector is fairly modest, as their taxable incomes are usually quite low. According to a World Bank study in year 2006, Kenya’s informal sector constituted 98 percent of all businesses in the country, absorbed annually up to 50 per cent of new employment seekers and had an employment growth rate of 12-14 percent. In the endeavor to realize this goal, KRA faces several problems when dealing with the informal sector. Some of these problems include financial literacy level of the taxpayers, book keeping and capital requirements. Fischer tax compliance model provides a framework for understanding the influence of socio-economic and psychological components on taxpayer’s compliance decision. AS theory holds that the government deters tax evasion through a sanction arrangement and audits. A tax payer will decide to violate the fiscal laws and evade his or her tax obligations when he or she perceives that the cost of evading tax is too low, believing he or she does that he or she is unlikely to be detected or audited. The SMEs are prone to tax evasion as they face difficulties in complying with tax laws. They are expected to comply with strict deadlines, keep proper books of accounts. This kind of environment leads to tax evasion. The study adopted a census research design with a target population of 79. This study used primary data collection through questionnaires while Secondary data was collected from published materials containing the relevant information on revenue collected from the informal sector over a period of stipulated time. The study was analyzed by use of inferential statistics and descriptive statistics by use of SPSS version 24 and the multi regression model was adopted. Findings revealed that there is a strong positive correlation between the variables of the study as shown by the 69.4% while 48.1% of variations in the dependent variable can be explained by changes in the independent variables hence, the remaining 51.9% is representative of other factors not accounted for in the study. Findings reveal that problems like tax complexity; low tax morale, low tax compliance and shadow economy may all be reduced by increasing the level of taxpayers' (individuals') financial literacy. Findings also reveal that most micro-enterprises do not keep books of accounts that will allow them to extract useful accounting information due to lack of accounting knowledge. The study thus recommends that policy makers should introduce stringent measures with respect to tax penalties and fines on the informal sector firms and tax payers who violate and act as an obstacle in the administration of this tax.
Challenges Facing Value Added Tax Refunds Payment Process by Kenya Revenue Authority
(KESRA/JKUAT - Unpublished research project, 2018) Mohamed, Fatuma Milgo
Delay in VAT refunds payment has led to businessmen and traders accuse KRA of being quick to collect tax, but slow in refunding. In recent past KRA has put in place several measures to ensure that VAT refunds are timely processed and paid. These include staff training, introduction of tax audit, information technology, compliance checks, legislation and compliance laws. These measures are geared towards accelerating VAT refund processes. However, this has not been the case, and majority of taxpayers have to wait for upto three years before receiving tax refunds. The objective of the study was to establish the perceived challenges facing Value Added Tax (VAT) refunds payment process by Kenya Revenue Authority with an aim of establishing administrative impediments facing the process. The study used both qualitative and quantitative research methods to collect and analyze data. Structured questionnaire was administered to collect primary data from a population of 200 employees of Kenya Revenue Authority in the Domestic Taxes Department, Refund section. Ethical consideration was adhered to when collecting data from respondents. The study found that the further improvements are required in the area of increasing VAT refund administration capacity with an aim of increasing timely refund application, processing and payment. The Tax Authority needs to pay attention to taxpayer education, VAT refund compliance and timely audits. Finally, there is the need to recruit more staff and embark on training of newly engaged staff.
Contribution of Excise Duty Reforms to Excise Duty Compliance by Kenya Revenue Authority
(KeSRA/Moi Unpublished Research Project, 2019-11) Nzioka, Peter Maingi
Contribution of Tax Incentives on Revenue Performance among Special Economic Zones Enterprises in Kenya
(KeSRA/Moi Unpublished Research Project, 2019-11) Korir, Goeffrey
Corporate Governance Practices and Tax Disclosure among Firms Listed at the Nairobi Securities Exchange, Kenya
(Unpublished Research Project, 2019) Kigo, Caroline Wambui
Customer-Focused Service on Tax Compliance in Kenya
(KESRA/JKUAT - Unpublished research project, 2022-09-01) MUTHURI, JANE
Kenya Revenue Authority is involved in revenue collection mainly from taxation of taxable persons in the economy. Small businesses are often involved in tax evasion practices deliberately or without knowledge. It is not an easy fete to convince the small and medium enterprises to comply with tax laws. It is for this reason that customer service is seen as a good strategy through which tax compliance among the Small and Medium Enterprises. This study had the general objective of assessing the sequel of customer service on tax compliance in Kenya. The study had three specific objectives: To find out the effect of tax payer training on tax compliance, customer care staff training and to examine how communication to customer strategy on tax compliance, a case of SMEs in Nairobi Central Business District. The study adopted a descriptive research design because it had the objective of establishing the relationship between the variables. The study had a target population of 1,500 Small and Medium Enterprises operating with the Nairobi Central District. A sample of 150 was selected through stratified sampling which acted as a representative of the entire population. The study used descriptive statistics in data analysis. The study has found out that the most enabling factor is customer communication, followed by customer care and the lowest influencing is taxpayer training. Further, the study has found there is a need to improve the customer service of KRA in order to foster voluntary tax compliance. The regression model has found out that 53.7 % of the variations of Turnover Taxes is explained by taxpayer training, customer care training and communication strategy. The study recommends that the KRA needs to establish a strategic customer care department in order to facilitate information dissemination which will foster tax compliance among the SMEs in Kenya. Tax training should be done regularly and the appropriate communication channels should be used.
Determinants of alternative dispute resolution mechanism among medium taxapayers: a case study of medium taxpayers in Nakuru County, Kenya.
(KESRA/JKUAT - Unpublished research project, 2020) Kaluhi, Gladwell Jones
The study aims to investigate the Determinants of ADR mechanisms among medium taxpayers 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 variables included perceived benefits, perceived ease of use and knowledge and awareness which are the independent variable of the study. The dependent variable is ADR mechanisms. The study employed descriptive research design and the target group was 1200 medium taxpayers registered by KRA, Nakuru County. Stratified sampling technique used to sample the population and the sample size comprised of 120 medium taxpayers. The study adopted primary data and research instruments were closed structured questionnaire Data analysis conducted using Statistical Packages for Social Sciences (SPSS) version 2017. The study analyzed data through descriptive and inferential statistic. The study found out that The coefficient for perceived benefits is -0.148, so we expect a -0.148 unit decrease in the adoption of ADR holding all other variables constant. The coefficient for perceived ease of use is 0.341 so for every unit increase in perceived ease of use, we expect 0.34 point increase in adoption of ADR. For knowledge and awareness, is represented by a coefficient of 0.298, meaning for every increase in perceived ease of use a 0.29-unit increase in adoption of ADR is predicted holding all other variables constant. The study recommended that The regulation on ADR in tax disputes given by KRA should be aimed at making ADR process less costly to ensure all the taxpayers and the KRA can benefit from it. The KRA should carry out intensive creation of awareness and sensitization so as to encourage the use of ADR to citizenry
Determinants of capital gains tax performance among property owners in Nakuru City, Kenya
(KeSRA_Moi University, 2023) Lesupeer, Mpukiyan Peter
Tax compliance remains to be a very crucial subject to researchers in many parts of the world across the globe. Despite the increasing need to raise the level of revenue collection, developing countries still face the challenges of low tax compliance. Capital gains taxes for practical and political reasons are perpetually riddled with exemptions and exceptions making them complicated to administer and to comply with. The big complication is determining the true capital gain net of inflation after netting out the purchase price and the cost of maintenance and investment in the asset over the years. The main objective of this study was to establish the determinants of Capital Gains Tax performance among property owners in Nakuru City, Kenya. The specific objectives were to determine the effect of taxpayers‟ sensitization, systems automation and taxpayers‟ perception on capital gains tax performance. This study was built on the benefit theory of taxation, universal theory of acceptance and use of technology and social influence theory. The study adopted explanatory research design. The target population was 6,231 property owners with movable and immovable properties in Nakuru City where a sample of 376 property owners was drawn. Primary data collection was employed in the study using structured questionnaires. The study used descriptive statistics and multiple linear regression analysis to establish the effect of the determinants of capital gains tax performance. The study findings showed that taxpayers‟ sensitization, systems automation and taxpayers‟ perception had a statistically positive significant effect on capital gains tax performance with evidence of beta values of: taxpayers‟ sensitization (β1=0.357, p=0.000<0.05),systems automation (β2=0.261, p=0.003<0.05) and taxpayers‟ perception (β3=0.285, p=0.001<0.05).The study results concluded that taxpayers‟ sensitization, systems automation and taxpayers‟ perception had significant influence on capital gains tax performance. Based on the findings, the study recommends that KRA should pay more attention on taxpayers‟ sensitization that contributes to online payment process being efficient in payment of taxes. The study therefore suggests that future research should be conducted to investigate effect of other variables such as cost and tax knowledge on Capital Gains Tax performance.
Determinants of consumption tax compliance among micro and small enterprises in Ruiru Town
(Kenya School of Revenue Administration_Moi University, 2020) Thuku, Mike Njogu
Micro and small enterprise sector is the largest employer in Kenya accounting for over 80% of all employment. The sector also contributes significant proportion of the national GDP estimated to be over 20%. However, tax revenue contribution from this sector is below expectation and accounts for less than 3% of all tax revenue collected. This study was conducted to establish the determinants of consumption tax compliance among micro and small enterprises in Ruiru town. The specific objectives of the study were to determine the effect of tax administration on consumption tax compliance among micro and small enterprises in Ruiru town, to establish the effect of the size of enterprises on consumption tax compliance among micro and small enterprises in Ruiru town and to determine the effect of taxpayer education on the level of consumption tax compliance among micro and small enterprises in Ruiru town. The study was founded on social contract and ability to pay theories which express tax as a contractual obligation payable according to taxable capacity of taxpayers. The study targeted micro and small enterprises in Ruiru town in Kiambu County and adopted an explanatory research design to understand what, why and by how much, aspects of micro and small enterprises determine consumption tax compliance among these enterprises. A pilot study was conducted in Juja town to test the validity and reliability of the research instruments that were used for the study. A structured questionnaire was used to collect primary data from a sample of 127 enterprises which were selected through random sampling from a population of 161 micro and small enterprises licensed by Ruiru Sub-county Business Licensing Department. The data collected was tested for validity and reliability and analyzed. Tax administrations, size of enterprise and taxpayer education were found to have significant effect on consumption tax compliance with p<0.05 for all the variables. Tax administration was found to have a Beta coefficient of 0.363, 0.223 for size of enterprise and 0.636 for taxpayer education against consumption tax compliance respectively. The independent variables were found to cause 36.9% change of compliance tax compliance when combined with R Square of 0.369 at p<0.05. Multiple regression analysis was performed and yielded the regression equation of the study. The study then made conclusions on tax administration, Size of the enterprise and taxpayer education that all the independent variables were found to play a significant role in the consumption tax compliance among micro and small enterprises in Ruiru town. The study found that tax compliance checks and tax audits have a significant effect on consumption tax compliance and recommended that KRA should employ qualified staff who will be able to conduct comprehensive tax audits and those found to be non-compliant should be encouraged and assisted where necessary. The study also recommended that KRA should simplify the procedures and processes involved in filing of returns and payment of taxes and make them understandable and executable by all taxpayers including those without special expertise. The study also recommended enhancement of taxpayer education through incorporating it as a subject in school curriculum from lower levels of education. Tax seminars should be made more frequent, free of charge and open for all and properly publicized to reach more people. It was also recommended that KRA focus on all enterprises irrespective of their size to promote tax compliance for all enterprises.
Determinants of Corporation Tax Performance among Small and Medium Enterprises in Nairobi Central Business District,Kenya
(KeSRA/Moi Unpublished Research Project, 2022) Mbewa, Gordon Oscah Ochieng
Corporation tax is a key source of revenue for most governments across the globe that enables them to provide public goods and services such as free education, subsidized medical services and infrastructure. However, its performance in Kenya has been below target. This is majorly attributed to the SMEs who despite contributing significantly to the GDP are under taxed. This study was to determine factors affecting corporation tax performance among small and medium enterprises Nairobi central business district, Kenya. The objectives of the study were Specifically, to determine the effect of taxpayer education on corporation tax performance among small and medium enterprises Nairobi central business district, to establish the effect of system automation on corporation tax performance among small and medium enterprises Nairobi central business district, to determine effect of tax audit on corporation tax performance among small and medium enterprises Nairobi central business district and to establish the effect of deterrence sanctions on corporation tax performance among small and medium enterprises Nairobi central business district. The study was supported by three theories of taxation namely; Ability to pay theory, Economic Deterrence Theory and Theory of Technology Acceptance. The study adopted an explanatory research design. The target population was 3461 who are small and medium enterprises in Nairobi central business district and Sample size of 358 respondents The primary data was collected by use of questionnaires, Regression analysis was used to determine the significance and relationship of the variables. Statistical tools for data analysis comprising descriptive and inferential statistics were applied to evaluate variations in manifestations of the variables and to test the hypotheses respectively. The findings indicated that the independent variables had a statistically positive significant effect on corporation tax performance: taxpayer education (β 1= 0.237, p=0.000<0.05), system automation (β 2= 0.275, p=0.000<0.05) tax audit (β 3= 0.359, p=0.002 <0.05) and deterrence sactions (β 3= 0.281, p=0.000 <0.05) The results concluded that taxpayer education, system automation, tax audit and deterrence sanctions significantly affect corporation tax performance. Based on the findings, the study recommends that KRA to pay more attention on tax audit that would enhance corporation tax performance. Therefore, future research can be done on other variables such as the effect of compliance cost on corporation tax compliance among SMEs in Nairobi County Kenya.
Determinants of Digital Service Tax Awareness among Digital Corporations in Kenya
(KeSRA/Moi Unpublished Research Project, 2022) Kiondo, Justus Kamau
Global digital economy has presented a disruptive market economy where goods and services are traded online without the necessity to have a physical presence in the location where which sales are realized. This presents to many governments in the world the challenge of collecting the rightful amount of tax revenue from these digital economy platforms. Still, majority of these firms trading within the digital economy are not compliant. This study seeks to establish the determinants of digital service tax awareness among digital corporations in Kenya. The objectives of the study were to determine the tax knowledge, fairness of the tax and digitalization on digital service tax awareness among corporates in Kenya. The study was supported by three theories namely; The Ability to Pay Theory, The innovation diffusion theory, technology acceptance theory. The study adopted explanatory research design where the target population were all companies offering digital services in Kenya. The study adopts population census where a total of 130 corporates were subjected to the study. Primary data was used to collect the data using questionnaires. Regression and Correlation analysis was used to determine the significance and relationship of the variables. The data was analyzed using descriptive and inferential statistics. The study results showed that indeed; tax knowledge, fairness and digitalization enhances tax awareness on among corporates in Kenya. Regression analysis was conducted; the findings revealed that tax knowledge, fairness and digitalization correlate with tax awareness. The study findings indicated that tax knowledge had β1 0.398 =p value of 0.001 which is less than 0.05. Fairness β2 0.312 =p value of 0.004 which is less than 0.05. And digitalization β3 0.456 =p value of 0.000 which is less than 0.05 significantly affect digital services among corporates in kenya. The study recommends that the study recommends that the management of Kenya Revenue Authority should put more emphasis on the digitalization of services to enhance tax awareness. Further research may be done by employing secondary data from tax authorities to model tax awareness.
Determinants of E-filing system adoption among taxpayers in Gatundu South Sub-County kiambu county, Kenya
(KeSRA_Moi University, 2023-09) Njuguna, Jesse Njeru
Due to advancement in technology many countries have shifted to e-Filing Systems to enable taxpayers to file their tax returns online on their own from any location connected to the internet without necessarily visiting the KRA-workplaces for help in filing their tax returns in every calendar year within the month of June. This notwithstanding, many taxpayers are still seeking help from KRA work-places to file their tax returns and in some instances seen them request for the extension of tax filing time in every calendar year within the month of June which always forces KRA to operate for longer hours both in weekdays and weekends in order to support taxpayers in filing their tax returns invoking the issue of e-filing system adoption. It is surprising that a few studies have examined this concern yet e-filing ought to make it convenient for taxpayers to file their tax returns on their own. Consequently, the study invokes the question as to what drives taxpayers to resort to KRA work places, professionals and cybercafé for help in filing their tax returns. The study aimed to examine the determinants of e-filing system adoption among taxpayers in Gatundu South Sub-county, Kiambu County. The specific objectives were to determine the effect of perceived ease of use, perceived usefulness, facilitating conditions and user ability on e-filing system adoption among taxpayers in Gatundu South Sub County. The study was anchored on three theories; Unified Theory of Acceptance & Use of Technology, Technology Acceptance Model and Diffusion of Innovation Theory. The study employed explanatory research design. The target population for the study was 75,974 potential users of the e-filing system (iTax) in Gatundu South Sub-County who were derived from the 2019 census report by the Kenya National Bureau of Statistics. The study used random sampling technique in selecting a sample size (n) of 398 respondents in Gatundu South Sub-County. The study collected primary data through close-ended questionnaire, with a response rate of 84%. The data was analyzed using descriptive and inferential statistics to determine the association between variables, with the measurement of variables based on 5-point Likert Scale. Correlation and regression analysis provided an understanding of the relationship between the study variables. On Regression, These results indicate that the independent variable, perceived ease, perceive usefulness, facilitating conditions and user ability caused a variation of 27.3% (R2=0.273) on e- filing system adoption. The study findings indicated that perceived ease, perceived usefulness, facilitating conditions and user ability had a statistically positive significant effect on e-filing system adoption as per Beta coefficients of perceived ease (β1=0.395, p=0.000<0.05), perceived usefulness (β2=0.227, p=0.000<0.05), Facilitating conditions (β3= 0.264, p=0.000<0.05) and user ability (β4=0.009, p=0.000 <0.05). The study results concluded that perceived ease of use, perceived usefulness, facilitating conditions and user ability affect e-filing system adoption. Based on the findings, the study recommends that KRA should plan a more effective strategy and formulate policies of promoting e-filing usage among individual taxpayers in Kenya. Therefore, future studies can be extended to individual taxpayers in other Counties within the country using other variables not utilized in this study to find out what drives/invoke them to resort to KRA work-places for support in filing their tax returns which always led to extension of working hours both in weekdays and weekends by KRA country wide in every calendar year in the month of June.
Determinants of Efficient Service Delivery of Government Agencies at Huduma Centers
(KESRA/JKUAT - Unpublished research project, 2022-09-01) CHEPKWONY, PURITY
Service industry is been critical in provision of services to businesses as well as final consumer. Service delivery in public sector is of utmost importance to the various government agencies across the world. Most governments across the world are evaluated against the level of service delivery to citizens. Public service delivery has been the basis of formulation of various policies by governments across the world. Efficient of service delivery in public sector has been a major concern across the globe. However, government agencies or institutions face challenges that hinder them from providing efficient services to its citizens. The current study therefore seeks to establish the influence of the influence of staff competencies, electronic queue management and one-stop model on efficient service delivery. This study was guided by servqual theory that was developed by Parasuraman, Berry and Valarie to access to assess customer perceptions of service quality in service industry. This study adopted descriptive research design as the strategy for data collection, analysis and presentation of study findings. The current study target all customers visiting Huduma centers to obtain government services in a given day. On average, there are approximately 2000 citizens served on daily basis from all the 45 Huduma centers in Kenya. The sample size for the study was determined by use of Naissuma formula. In respect to this, a sample size for the study was 95 respondents. The sample size was selected using stratified random sampling. Data for the study was collected using structured questionnaires. The pilot study for this study was carried out in Huduma center in Nakuru among respondents who did not take part in the actual study to avoid data contamination. The pilot study sample was 10 respondents. To ascertain the validity of the research questionnaire, the study constructed the questions in the questionnaire in line with the research objectives. In addition, the study sought the input of the research supervisor and four KRA officers working at Huduma centers to establish the relevance of the questions in the questionnaire. Reliability was ascertained through the use of Cronbach’s Alpha test of internal consistency. Data obtained from the field through the use of questionnaires was entered into Statistical Package for Social Sciences (SPSS). Data analysis was descriptive and inferential. Frequencies, percentages, means and standard deviations was used for descriptive analysis while simple and multiple linear regressions was used for inferential statistics. The study was of great significance to both practice and theory. The study findings was used by the government agencies to evaluate policies and services offered to the citizens with an aim of improving the efficiency of public service delivery. Academicians and future researcher in the line of public service delivery may use the findings that was obtained from this study to conceptualize their studies and develop their literature review.
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 Monthly Rental Income Tax Compliance among Landlords in Mavoko Sub-County in Kenya
(KESRA/JKUAT - Unpublished research project, 2020) Mateli, Nancy Mwende
Tax is the main source of government revenue in developing countries as well as developed ones. Although collection of tax has been a challenge especially in the informal sector specifically from landlords who own residential property. The main objective of the study was to establish the determinants of monthly rental income tax compliance from landlords in Mavoko sub County in the last three years. The study looked at the tax rates, tax policies and procedures, and taxpayer knowledge by landlords. The study was guided by; the expected utility theory, benefits received theory, fiscal psychology theory, social psychology theory, and the ability to pay theory. The study was carried out in Mavoko Sub County for the year 2016, 2017 and 2018. The study adopted a descriptive research design targeting 544 landlords in Mavoko Sub County in Kenya. The researcher used a stratified random sampling as well as geographical sampling method to get the right sample size from the target population of 544 landlords where a sample size of 54 landlords was picked where every tenth person was picked from the list of landlords. A semi structured questionnaire was used to collect data from the landlords. The data was then keyed, coded and analysed using the SPSS software, Microsoft excel, inferential and descriptive statistics. The regression model used had three dependent variables namely, tax knowledge, tax rates, and tax procedures and regulation while monthly rental income tax compliance was the dependent variable. The study established that at 5% level of significance, tax knowledge, tax rate, tax procedure and regulation all had a positive beta with p-values less than 0.05. The study concluded that the determinants of monthly rental income tax compliance from landlords in Mavoko Sub County include tax rate, tax knowledge and lastly the prevailing tax procedures and regulations. The study recommends that KRA should harmonize the current monthly rental income tax rate with the East Africa Community so that a standard rate is established. KRA should organize for more tax clinics, seminars and workshops in Mavoko Sub County and provide incentives for those tax payers who attended such education programs. KRA should simplify the tax procedures and regulations and avoid too many bureaucracies in tax administration. The study was limited by the corona pandemic and a sample size of 54 respondents who were the landlords in Mavoko Sub County. Future studies should be conducted covering a relatively larger sample size, probably the whole County or more than one county in Kenya and during pandemic free times. The results of the study are expected inform strengthening of policies and regulations governing monthly rental income tax in Kenya as formulated by KRA. If well implemented, there would be increased compliance with monthly rental income tax which would increase the amount of tax revenues generated and thus the overall growth of the economy.
Determinants of Residential Monthly Rental Income Tax Compliance among Landlords in Masii Town in Machakos County, Kenya
(2022) Kasiva, Elizabeth
In Kenya, tax compliance is still low despite the use of adverse measures such as; penalties, armed monitoring, routine audits and fines. This has been attributed to the fact that there is still deemed to be a lack of proper mechanisms to impose tax collection and ease of tax calculation for all tax payers. The study aimed to determine factors that influence residential monthly rental income tax compliance among landlords in Masii Town in Machakos County. The study was guided by three research objectives: To examine the effect technology on residential monthly rental income tax compliance among landlords in Masii Town in Machakos County; To establish the effect of tax payers knowledge on residential monthly rental income tax compliance among landlords in Masii Town in Machakos County; To determine the effect of compliance costs on residential monthly rental income tax compliance among landlords in Masii Town in Machakos County. The study was guided by three theories namely: Economic Deterrence Theory, Diffusion of Innovation (DOI) Theory and Fiscal Exchange theory. The target population was 255 respondents and Sample size of 155 respondents with response rate of 85%. Data was collected from a primary source.A Questionnaire was used to collect the primary data while Data analyzed included both descriptive and inferential statistics. The study findings indicated that technology, taxpayer knowledge and compliance cost signficantly affects residential monthly rental income tax compliance with p value of 0.001, 0.002 and 0.000 respectively which is less than 0.05. The model summary showed that a unit change in technology increases residential rental income tax compliance by 0.316,a unit change in taxpayer knowledge increases residential rental income tax compliance by 0.239 and a unit change in cost of compliance decreases residential rental income tax compliance by -0.383.Finally, the summary of the findings reveal that technology and taxpayer knowledge positively affects residential monthly rental income tax compliance while compliance costs negatively affect residential monthly rental income tax compliance.The study results reveal that the use of I-tax has saved respondents time while filing taxes and taxpayers find filling returns online on a monthly basis to be an easy process due to internet access .Technology is used to increase tax administration efficiency, increase taxpayer services and boost tax compliance. Findings on knowledge showed that having knowledge and understanding of tax regulation helps taxpayers know the importance of declaring their taxes, dates of making payment, where and how to make tax payment. Cost remains a challenge as taxpayers incur cost such as; getting and organizing information, record keeping, employing tax experts, buying stationaries and materials that will be used during filing and time spent calculating and filing taxes. Based on the findings, the study recommends that KRA, the government and tax practitioners should formulate policies that emphasize leverage on technology to enhance collection of tax revenue. Furthermore, cost reduction mechanisms should also be adopted to enable taxpayers to comply at minimum costs. Therefore, future studies should be carried out to examine the effect of stakeholder sensitization on residential monthly rental income tax compliance
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.