Effect of Tax Innovations on Growth of Small and Medium Enterprises in Kilifi County
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Date
2020-09
Authors
Kambu, Carlos Mushele
Journal Title
Journal ISSN
Volume Title
Publisher
KESRA/JKUAT - Unpublished research project
Abstract
Small and Medium Enterprises play a major role in development of the economy in a country. They make up to 90% percent of the entire economy of a many countries both in the developed and developing nations; they help in creation of employment, development of innovations, economic dynamism which finally leads to national growth and alleviation of poverty. Despite major innovations in taxation and tax policies, Small and Medium Enterprises form the largest group of the hard to tax taxpayers. The main objective of this study was to determine the effect of tax innovations on growth of Small and Medium Enterprises in Kilifi County. The researcher sought to determine the effect of online tax systems, tax legislation and service delivery model on growth of Small and Medium Enterprises in Kilifi County. The study adopted a descriptive cross-sectional survey research design to collect data from respondents. The population was 652 Small and Medium Enterprises in Kilifi County and sample of 248 Small and Medium Enterprises in Kilifi County was drawn from the total population using the Yamanes equation. The study adopted systematic and random sampling techniques. Data collection was conducted using structured questionnaires. The collected data was coded and scientifically analyzed using statistical package for the social sciences, (SPSS) where descriptive and inferential statistical techniques was applied. In the process, a regression analytical test was performed on the variables of the study. Analyzed data was summarized and presented in tables, graphs and charts. The results was examined, justified and valid inferences be drawn. This study found that electronic tax system, tax legislation, and service delivery model positively and significantly affects SME’s growth in Kilifi County. This study concluded that all the independent variables studied had significant effect on the growth of SME’s in Kilifi County The study revealed that among the three variables studied, electronic tax system came out to be most one having the highest variable affecting the growth of SME’s in Kilifi County. This study therefore recommends to KRA to ensure that the role of electronic tax system of helping reduce cost of filing tax is achieved. It is recommended that SME’s organization and other key stakeholders have to invest in robust innovation and more importantly tax innovation that enhances SME’s growth which plays a critical part towards economic growth and development particularly in Kilifi County.
Description
Tax Administration
Keywords
Electronic tax system, Tax legislation, Service delivery model, Growth of SMEs, Turnover tax, Tax service offices