Factors Affecting Value Added Tax Compliance Among Mechanics IN Nairobi County.
Loading...
Date
2021
Authors
Lutomia, Eliud
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
Taxation of the informal economy has been a challenge faced by many countries in various regions of the world. Even, though many countries especially the developing economies struggle with meeting the demand for more revenue generation, the informal economy has been left untapped appropriately. Several studies have been carried in this area and still, there is no better and agreeable way on how to tax the informal economy which seemingly has the potential to plug the revenue gap. For this reason, the study aimed at investigating the effect of value added tax on VAT compliance among mechanics in Nairobi County. The specific objectives of the study were to investigate the effect of VAT knowledge on VAT compliance, the effect of VAT imposition procedures on VAT compliance, and the effect of tools and systems on VAT compliance among mechanics in Nairobi County. The study was anchored on the ability to pay theory and systems theory. The study adopted an explanatory research methodology. The target population was a total of 428 from where a sample of 207 owner mechanic garages was drawn using the Brigit and Lewin formula. Both cluster and systematic sampling techniques were used to reach the target respondents. Primary data was collected using a self-administered questionnaire on a 5-point Liker t scale with closed ended questions. Study instrument was subjected to validity, reliability and statistical assumptions of regression tests before data were analyzed. Descriptive data was then presented in descriptive tables while inferential statistics were analyzed using regression and correlation analysis. Multiple regression analysis was established with a positive insignificant linear relationship between VAT knowledge on VAT compliance among mechanics in Nairobi County with evidence of beta 0.074, p=0.294, ρ>0.05. However, there was a positive significant linear effect of VAT imposition procedures on VAT compliance among mechanics in Nairobi County with evidence of beta -0.235, p=0.003, ρ
Description
Keywords
Garages and Mechanics, Tools and Systems for VAT Administration, VAT Compliance, VAT Imposition Procedures, VAT Knowledge