Effect of Technological Uptake On Pay as You Earn Tax Performance from Medium Taxpayers in Kenya
Loading...
Date
18-08-21
Authors
Cheboi, Cynthia Jemutai
Ogaga, Bruce
Journal Title
Journal ISSN
Volume Title
Publisher
Kenya School of Revenue Administration
Abstract
Every year the Kenyan Government sets targets of the amount of tax it intends to collect.
However, it is noted that often times the Kenya Revenue Authority fails to achieve these targets.
Hence it necessitates an investigation into ways to improve revenue collection which gives rise
to this study. The objective of the study was to investigate the effect of technological uptake
on Pay As You Earn tax performance. The specific objectives of the study were to establish the
effect of E-registration on Pay As You Earn tax performance, to determine the effect of E-filing
on Pay As You Earn tax performance and to establish the effect of E-payment on Pay As You
Earn tax performance. The theories that guide this study are: Technological Acceptance Theory
and the ability to pay theory. The study adopted the descriptive research design. The population
of the study was Medium taxpayers registered under the Medium Taxpayers Office of Kenya
Revenue Authority. There were 3,972 medium taxpayers registered under the Medium
Taxpayers Office as at 31st December, 2017. A census of the 3,972 medium taxpayers was
used. The study used secondary data collected from KRA records and reports. This helped get
data on registration uptake, returns filed, the number of transactions completed through the
payment gateway and tax collected. Both descriptive statistics and inferential statistics were
carried out with the help of the SPSS software. Data was analysed using regression analysis by
the use of a linear regression model whereby Pay As You Earn tax performance was the
dependent variable and the independent variable was technological uptake. In the first research
question, the study found that the e-registration technology enhanced PAYE tax performance
significantly, although the effect was weak. On the other hand, the study found that E-filing
technology affects PAYE tax performance significantly and the effect was strong, while in the
last research objective it was established that e-payment influences PAYE tax performance
significantly. Technological uptake has caused a variation of 93.4% (R2=0.934). The study
recommends that KRA should scale up the use of technology in all tax streams to enhance tax
revenue collection and performance. The study also recommends concerted effort from the
KRA management on creating awareness of the tax systems, to consistently and incrementally
grow technology, while managing change to enhance uptake. In addition, during the upgrade
or change over, KRA should manage the stages seamlessly to ensure that the momentum of the
uptake does not stagnate.
Description
Keywords
digital economy, taxation, Pay As You Earn
Citation
Cheboi, C., & Bruce, O. (2021). Effect of Technological Uptake On Pay as You Earn Tax Performance from Medium Taxpayers in Kenya. African Tax and Customs Review, 4(1), 21. Retrieved from https://atcr.kra.go.ke/index.php/atcr/article/view/74