Effect of block management systems on rental income tax performance by Kenya Revenue Authority Mombasa
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Date
2020
Authors
Garise, Elisha Kessy
Journal Title
Journal ISSN
Volume Title
Publisher
KESRA/JKUAT - Unpublished research project
Abstract
Block management system is a tax administration reform instrument designed to enhance taxpayer compliance by simplifying the tax process which minimizes the compliance cost and by following up taxpayers closer and delivering services and support from a nearby location. The purpose of the BMS is to identify and facilitate easy registration of new taxpayers and facilitate the close monitoring of taxpayers’ activities and their movements. This study sought to investigate the effect of block management systems on rental income tax performance by Kenya Revenue Authority Mombasa. The specific objectives were; tax administration, tax enforcement and tax education. The study was anchored on three theories; Fischer Tax Compliance Model, Optimum Income Tax Theory and Economic based theory. The target population comprised of 137 respondents from Mombasa regional office. The study employed descriptive research design. Stratified random sampling technique was used to select the sample size of 110. A pilot study was undertaken on 10 of the respondents to test the reliability and validity of the questionnaire. Primary data was collected using questionnaires which were closed ended. Quantitative data was analyzed using SPSS version 25. Descriptive analysis measures such as frequency, percentage, mean and standard deviation was used in data interpretation. Regression analysis was used to examine the effects of the independent variables; tax administration, tax enforcement, tax education and rental income tax performance (the dependent variable). The R2 analysis was used to measure the goodness of fit of the model being assessed. Correlation analysis was used to determine the strength of relationship between the variables. The study found out that there was a positive and significant relationship between tax administration and rental income tax performance. Further, the results revealed that there was a positive and significant relationship between tax enforcement and rental income tax performance. Lastly, there was a positive and significant relationship between tax education and rental income tax performance. Based on the findings, the study concluded that tax administration, tax enforcement and tax education have a positive and significant effect on rental income tax performance. The study recommends that emphasis should be on tax administration to broaden the tax base so that existing tax rates can be reduced without affecting government revenues. Further, there is need for a well-functioning tax enforcement system to increase tax compliance, tax audits and tax assessment. Lastly, to enhance rental income tax performance there is need to intensify taxpayer education in terms of increasing the number of sessions and broadening coverage to include tax consultants. This will enlighten the taxpayers on existing law and any other tax liability. The research findings were expected to benefit, property owners/landlords, researchers and academicians, KRA as well as other government collection agents.
Description
Keywords
Block Management System, Tax Avoidance, Tax Compliance