The effect of revenue collection strategies on value added tax performance: a case of domestic taxes department in east of Nairobi region, Kenya.
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Date
2019
Authors
Mwangi, Ruth
Journal Title
Journal ISSN
Volume Title
Publisher
KESRA/JKUAT - Unpublished research project
Abstract
Despite undertaking many tax reforms, KRA is yet to meet its target with regard to revenue collection. According to the KRA Sixth/Seventh Corporate plan, the authority has continually fallen short of meeting its revenue targets for the past five financial years. The general objective of the study was to establish the effect of the revenue collection strategies on value added tax performance, with a focus on domestic taxes department in East of Nairobi region, Kenya. The study particularly focused on automation, staff training and enforcement, and their effect on value added tax performance. The anchoring theories were system theory, economic deterrence theory and optimal taxation theory. The study adopted a descriptive research design with a study population of 200 managers at domestic taxes department in KRA, Nairobi East region. The target population used Fisher’s formulae to calculate the sample of 132 respondents. This research used primary data collected using structured questionnaires which were self-administered. Secondary data was obtained from journals which for academic research purposes. After quantitative data was obtained through questionnaires, it was prepared in readiness for analysis by editing, handling blank responses, coding, categorizing and was finally keyed into Statistical Package for Social Sciences (SPSS version 22) computer software for analysis. The statistics generated were descriptive and inferential, and was analyzed using correlation and multiple linear regression. The study concluded that revenue collection strategies had a significant effect on VAT performance of the domestic taxes department in Nairobi East Region, Kenya. Specifically, the study concluded that automation, staff training and enforcement had a significant effect on VAT performance under the sampled region. Furthermore, the study concluded that the effect of revenue collection strategies on value added tax performance was positive, though there may be room for further research on the subject. Based on the findings, the study made several recommendations; firstly, that the KRA should consider scaling up the adoption of automated systems as this would not only reduce the costs of operation but also increase efficiency by making operations seamless. Secondly, the study recommended that KRA should consider allocating a larger budget to staff training through the human resource department as the staff ought to keep in step with the constant reforms that are being made in the taxation system in Kenya. This would ensure that there is no gap between formulation and implementation of tax reforms. Thirdly, the study recommends that KRA should look into restructuring their surveillance system, so as to identify tax evaders, as enforcement has proved to be very vital in enhancing VAT performance.
Description
PROJ 336.27 MWA
Keywords
Revenue collection strategies, Revenue performance, Staff training