Factors affecting Income Tax compliance among Small Scale manufacturing firms in Nairobi County, Kenya : Study of manufacturing firms in Kariobangi Light Industry
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Date
2019
Authors
Wamuyu, Alice Wanjiru
Journal Title
Journal ISSN
Volume Title
Publisher
KESRA/JKUAT - Unpublished research project
Abstract
The challenge facing revenue administration was to ensure that the taxpayers - pay the correct amounts of taxes, and that they do it at the correct time. Achieving full tax compliance is the ultimate goal of any revenue administration. However, the practice of tax evasion still presents a serious threat to achieving this goal, and it continues to directly deny the Government its rightful revenue. Therefore, this study sought to examine the factors affecting income tax compliance among the small scale manufacturing firms. The specific objectives of this study was in identifying the effect of filing procedures, auditing services, record keeping techniques and compliance cost on income tax compliance. The methodology of the study constituted descriptive research design. The population of the study were accounting representatives from the 55 registered light manufacturing firms at Kariobangi light industry. The sampling technique convenience sampling design. During data collection, questionnaires were used. In the analysis quantitative techniques which entailed deriving descriptive data aided by SPSS. The percentage ratings and frequencies were presented on tables and figures such as bar graphs. From the findings it was established that filing procedures were tedious and therefore, did not provide good opportunities for traders to follow up with tax compliance. However, despite the challenges on filing procedures, some traders indicated that they do still seek assistance from other professional service providers who guides them through the process. Traders indicated that auditing services was quite an expensive affair. This was an indication that those who were able to afford the services were able to meet the requirements from the KRA regarding tax remittance and compliance. The study recommends that there is need for the management at KRA to ensure that filing procedures are simplified. The tax filing procedures should be simplified to the extent that even the least learned traders are able to operate the services without seeking professional services from external consultants.
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Project
Keywords
Complaince Cost, Income Tax, Audit