Factors Affecting Rental Income Taxpayer’s Compliance
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Date
18-08-21
Authors
Ondoro, Ombogo Boniface
Journal Title
Journal ISSN
Volume Title
Publisher
Kenya School of Revenue Administration
Abstract
Taxation is the primary source of revenue for governments throughout the world to implement
their political, social-economic agendas and to deliver services to the citizens. In Kenya,
increased government recurrent expenditure, capital expenditure, and the need to finance both
national and county government activities using local sources of funds has called for the
government to bring into the tax net sectors that have remained untaxed before. In the finance
bill of 2012/2013, a lot of emphasis was put on rental income as a subject of taxation. Previous
economic statistics records of KRA and Treasury indicate that less than half of property owners
and developers had complied with these tax requirements. This study was carried out to
establish how property owners have responded to the property taxation measures, and the
factors that influenced their compliance such as perception, human resource, tax education and
cost of compliance to rental income tax in Kenya. To achieve this objective, the researcher used
both primary and secondary data. Primary data was collected by seeking opinion from a sample
of 210 property owners, sampled from the seven KRA regions using telephone interview
questionnaires. While secondary data was collected from revenue records of KRA, previous
studies carried out by researchers on rental income tax both globally and locally for the purpose
of comparison. Data collected was analyzed by using the statistical software program namely
Statistical Package for Social science (SPSS) version 20. The quantitative data was analyzed
using descriptive statistics (frequency, percentage, mean and standard deviation) and a number
of techniques of analysis was used including Reliability test, Correlation and Multiple
Regressions. According to the responses of the taxpayer’s rental income tax compliance in
Kenya is influenced by: age, current occupation, financial constraints, referent group influence,
educational level of taxpayers, awareness of taxpayers, perception of tax fairness, opportunity
cost of evading, tax education, government incentives, trust of the tax collector, tax collection
procedures and tax audits. Based on the findings of this study the possible recommendation
includes: developing taxpayer’s capacity of understanding tax, upholding tax fairness and
equity, developing capacity of tax authority, improve taxpayers trust on the authority,
government to provide social services to the public to get trust from the society who will in
turn reduce tax evasion.
Description
Keywords
rental income, taxpayer compliance
Citation
Ondoro, O. (2021). Factors Affecting Rental Income Taxpayer’s Compliance. African Tax and Customs Review, 4(2), 13. Retrieved from https://atcr.kra.go.ke/index.php/atcr/article/view/78