Factors affecting remittance of direct taxes among small and medium enterprises in Kisumu County.
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Date
2019
Authors
Wambua, Everlyne Mwende
Journal Title
Journal ISSN
Volume Title
Publisher
KESRA/JKUAT - Unpublished research project
Abstract
Business incomes are expected to be taxed in Kenya and this is guided by Section 4 of the Income Tax Act in Kenya. Taxes that can be paid on income tax include pay as you earn corporate taxes as well as withholding taxes. All these are generally seen as direct taxes. This study sought to determine factors affecting remittance of direct taxes among Small and Medium Enterprises in Kisumu County. The study was guided by the following specific objectives; to establish the effect of liquidity on remittance direct taxes among Small and Medium Enterprises in Kisumu County, to assess the effect of costs of deterrent factors on remittance of direct taxes among Small and Medium Enterprises Kisumu County and to determine the effect of cost of remittance on remittance of direct taxes among Small and Medium Enterprises in Kisumu County. The study was informed by three theories namely; ability-to-pay approach theory and Allingham and Sandmo Theory (AS theory). A cross sectional descriptive research design will be used. The study targeted 500 SMEs in Kisumu town. The study will adopt stratified random sampling technique to select 222 respondents which shall be arrived at using Yamane (1975) formula. The study collected primary using questionnaires. The analysis of the collected data was conducted using means, standard deviation and regression analysis. The findings were presented using pie charts and graphs. The study revealed that liquidity, costs of deferent factors and costs of remittance all have a significant effect and relationship with remittance of direct taxes. The study concludes that that liquidity, costs of deferent factors and costs of remittance are critical factors influencing remittance of direct taxes. The study recommends that the management of the SMEs to make decisions that enhance the level of liquidity of their firms and thus positively enhancing their ability to remit direct taxes. KRA should seal all the loopholes and establish more stringent penalties and interests for the tax payers who do not remit their direct taxes. KRA should minimize the costs that tax payers meet in remitting their direct taxes.
Description
PROJ 336.24 WAM
Keywords
Direct Taxes, Cost of deterrent factors, Liquidity