Determinants of Residential Rental Income Tax Compliance by Individual Landlords in Nairobi: Case of Dagoretti Division
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Date
2019
Authors
Ndichu, Juliah Wachera
Journal Title
Journal ISSN
Volume Title
Publisher
KESRA/JKUAT - Unpublished research project
Abstract
Past researchers have identified rental income tax compliance in Kenya to be below 50%. With the ever-growing national budget, rental income tax is seen as an area in which KRA can realize additional revenue to fill the revenue deficits. This study sought to establish the determinants of residential rental income tax compliance by individuals in Dagoretti division. The study employed descriptive research design where data was collected from a sample of 50 landlords using questionnaires. The data collected was analyzed using descriptive and inferential statistics with the help of Statistical Package for Social Sciences version 21 for evaluation of relation between dependent and independent variables. Multiple regression model was adopted. The findings of the study found a significant positive relationship between tax rate, tax knowledge, fines and penalties and cost of compliance. From the study findings it was recommended that through taxpayer’s education the taxpayers should be made to understand that filing the tax returns on a monthly does not amount to them paying higher taxes at the end of the year. Also KRA should cooperate with the ministry of education to introduce tax education in the curriculum, also there should be frequent tax education, and come up with taxpayer education programs with a wide coverage such as the media. In addition, there should be effective and timely communication of changes to the tax laws. Finally, the compliant taxpayers should see their non-compliant counterparts getting punished so that they would see that compliance is a good thing.
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Keywords
Rental Income, Tax Compliance