Factors influencing tax compliance among small and medium enterprises in kisumu city
Loading...
Date
2019
Authors
Ochiel, Cleopa
Journal Title
Journal ISSN
Volume Title
Publisher
KESRA/JKUAT - Unpublished research project
Abstract
This research aimed to define the factors influencing Kenya's tax compliance, particularly focusing on small and medium-sized enterprises in Kisumu City. The factors of this study were the tax rate, the accessibility of tax data and the SME sector's cost of compliance with taxes. The concepts that guided the research were: Ability to Pay Theorem, Gunter Schmolders' sophisticated tax morale theory, and Marc Fleurbaey and Martin Feldstein's The Optimal Taxation Theory. A descriptive technique of study was adopted. The study targeted 451 SMEs out of which 211 of them were sampled. Using a self-administered questionnaire, data was gathered. Consequently, the information gathered was evaluated using statistical method and the study results displayed using graphs and tables. It was anticipated that the research finding would show the factors that affect tax compliance in the informal sector and provide suggestions on how to enhance tax compliance in the industry. The study found out that tax rates, availability of tax information and the costs incurred by the informal sector to be compliant have a postive and significant effect on tax compliance. The study concludes that ax rates, availability of tax information and the costs incurred by the informal sector to be compliant have an effect on tax compliance. The study recommends that KRA should consider reducing the tax rates while widening the tax base so as to increase compliance among the tax payers. KRA should create more awareness among the tax payers as it regards the need to file tax returns and pay taxes. KRA should put in place efforts to simplify the whole process of tax administration.
Description
Keywords
Tax Rate, Compliance, Enterprises