Factors Affecting Residential Rental Income Tax Compliance by Landlords in Machakos County, Kenya
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Date
2022
Authors
Kinyua, Caroline
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Abstract
The study sought to investigate factors affecting residential rental income tax compliance
among landlords in Machakos County in Kenya. The study specifically sought to find out
whether knowledge of the tax system and tax laws influences compliance on rental income tax
compliance among landlords in Machakos County, investigate the effect of penalties and
interests on rental income tax compliance among landlords in Machakos County, ascertain the
effect of tax rates of the revenue authority on rental income tax compliance among landlords
in Machakos County and establish whether modes of payment influence rental income tax
compliance among landlords in Machakos County. This study adopted a descriptive survey
design. The target population of this study was all landlords in Machakos County while the
accessible population were those landlords residing within the County. Simple random
sampling and convenience sampling was used to identify individual respondents. Primary data
was collected using questionnaires. The collected data was consequently analyzed
quantitatively using Statistical Package for Social Scientist software and the findings of the
research presented using tables. From the findings of the multiple regression analysis, the study
established when all other factors are held constant, a unit increase in Taxpayers Tax
knowledge would lead to a 0.259 increase in Residential Rental Income Tax Compliance in
Machakos County (β1= 0.259, p=0.000<0.05). It was also established that a unit increase in
Fines penalties and interests would lead to a 0.152 increase in Residential Rental Income Tax
Compliance in Machakos County when other factors are held constant β1= 0.152,
p=0.000<0.05). On Tax Rates, the study established that an increase in Tax Rates would lead
to a 0.112 decrease in Residential Rental Income Tax Compliance in Machakos County (β1=-
0.112, p=0.012<0.05). Last but least, the study established that unit increase in Modes of
payment would lead to a 0.313 increase in Residential Rental Income Tax Compliance in
Machakos County (β1= 0.313, p=0.000<0.05). The study thus concluded that taxpayer’s tax
knowledge, tax rates, fines penalties and interests and modes of payment affect residential
rental income tax compliance among landlords in Machakos County in Kenya. The study
recommended that there should be more training through public participation by Kenya
Revenue Authority to all taxpayer in the matters to do with residential tax compliance, tax
knowledge i.e. registration, how to file returns, generating payment slips, modes of payment,
the importance of filing returns, the related fines, penalties and interests in cases of
noncompliance among other aspects to enhance the levels of tax compliance by landlords in
Machakos county and the county as a whole. The study suggested that there is need for more
research to be done based on the same topic but in different regions within the boundaries of
Kenya.
Description
Post Graduate Diploma in Tax Administration
Keywords
Rental Income, Tax compliance, Rental Income tax