Effects of debt collection methods on revenue targets in Kenya Revenue Authority
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Date
01-10-18
Authors
Muthami, Alice Waturi
Journal Title
Journal ISSN
Volume Title
Publisher
KESRA/JKUAT - Unpublished research project
Abstract
The study sought to establish the effect of debt collection on Kenya Revenue Collection revenue targets among small and medium taxpayers in Central Kenya. The study employed a descriptive research design to achieve the desired objectives. The target population under the study was 600 who fall in the category of small and medium taxpayers in the Central Kenya Region, Nyeri Station. The study employed the use of questionnaires to collect the required data from the respondents who were a sample of 66. The data collected was coded, quantified, and analyzed quantitatively and qualitatively. The findings show that there was a positive relationship between revenue collected and GDP and debt collected and a negative relationship between revenue collection and rate of inflation. It was further found that GDP was statistically significant in the regression model while debt collected and rate of inflation were not statistically significant. Though debt collection is not a strong determinant to revenue collection it was concluded that use of effective tools would reduce debt portfolio and that following up on unpaid taxes will foster equity and encourage compliance amongst taxpayers. The study recommendations are: there is need for the treasury to fast track waivers processing to enable the KRA reduces its debt portfolio accordingly. Where the waiver has been denied then the authority will be better place to follow up with that debt soon rather than later and where it has been granted then the debt can be written off from the system and update its debt portfolio. The society in general is ignorant about their tax laws, hence there is need for KRA to simplify the tax system and make it easy for the taxpayers to know their tax obligations and honour them accordingly. This will avoid cases of debt arising out of audit as the taxpayer is assessed on what he was ignorant about
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Keywords
Kenya Revenue Authority, Debt Collection, Revenue