Determinants of tax compliance by public transport savings and credit cooperative societies in Kenya:
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Date
2019
Authors
Muraya, Lilian Wakarima
Journal Title
Journal ISSN
Volume Title
Publisher
KESRA/JKUAT - Unpublished research project
Abstract
Tax is the main source of revenue in Kenya. Money incurred from taxation is used to provide public services and goods to the citizens. Indeed, taxation in the informal business sector including SMEs and public transport continue to face serious issues. This research project is aimed at studying the determinants of tax compliance by public transport savings and credit cooperative societies in Kenya. A cross sectional descriptive research design was agreed and population was made of 37 public transport Sacco’s in Nyeri County hence a census of the 37 office administrators of the public transport SACCO’s in Nyeri town was pursued and a questionnaire used for data collection. The questionnaires were administered to the office administrators by the researcher and there after collected after one week. The collected data was summarized using descriptive statistical tools comprising the mean and frequencies and the binary logistic regression used to examine the association between the tax compliance determinants and tax compliance by public transport SACCO’s. The study revealed that deterrence sanctions positively (B = 0.354) and significantly (P-value 0.001<0.05) affected public transport SACCOs tax compliance while taxpayers’ perception positively (B = 0.525) and insignificantly (P-value 0.503>0.05) affected public transport SACCOs in Nyeri County tax compliance. The study also revealed that tax knowledge had significantly (P-value 0.001<0.05) and positively (B = 1.016) affected tax compliance by public transport SACCOs in Nyeri County. Finally, the findings show a negative (B = -1.213) and significant (P-value 0.001<0.05) relationship between tax compliance costs and tax compliance by public transport SACCOs in Nyeri County. The multiple logistic regression results established that deterrence sanctions had a positive (B = 0.438) and significant (P value = 0.001<0.05) effect on tax compliance by public transport SACCOs while taxpayers’ perception had a positive (B = 0.348) but an insignificant (P value = 0.660>0.05) relationship with tax compliance by public transport SACCOs. The study also revealed that tax knowledge had a significant (P value = 0.009<0.05) and positive (B=1.464) effect on tax compliance by public transport SACCOs. The results further established a negative (B=-1.524) and significant (P value = 0.004<0.05) relationship between tax compliance costs and tax compliance by public transport SACCOs in Nyeri County. The results led to the conclusion that noncompliance sanctions, knowledge in taxation and costs associated with compliance mostly affected tax compliance by public transport SACCOs in Nyeri County. The study suggested that severe fines and penalties should be imposed on non-complaint public transport SACCOs and frequent tax audits should be carried out by the Kenyan tax authority. The study also suggest that KRA should ensure transparency and accountability during collection of taxes and that KRA should carry out tax training programs among public transport SACCOs to enhance tax knowledge and awareness as this would motivate SACCOs pay taxes and file tax returns.
Description
Keywords
Tax compliance, Cooperative