Factors Affecting Tax Compliance

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dc.contributor.authorMuthiani, Moses
dc.date.accessioned2022-09-20T13:27:13Z
dc.date.available2022-09-20T13:27:13Z
dc.date.issued2022-09-01
dc.descriptionTax Administrationen_US
dc.description.abstractTaxpayer audit plays a huge role in raising tax administration and taxpayer compliance by influencing the behavior of the taxpayer. This study intended to establish the effect of tax audit on tax compliance by SMEs in Nairobi. The study was guided by the Policeman Theory, Agency Theory, and Classical Theory of Tax Compliance. The study adopted descriptive research design, and targeted small and medium enterprises (SMEs) in Nairobi Central Business District in Nairobi County. Stratified and systematic random sampling technique was used to select 50 respondents. Data was collected using a semi-structured questionnaire, and thereafter analyzed for final report writing. Quantitative data was analyzed using descriptive and inferential data analysis techniques. The resulys indicated that the SMEs sector was dominated by young people who had good education. It clearly emerged that tax audit, taxpayer awareness and employee competence, all had significant influence on the level of tax compliance by SMEs in Nairobi. Statistics indicated that 59% off the respondents agreed that tax audit had influence on tax compliance of small and medium businesses. Furthermore, 53%) of the respondents agreed that level of tax audit often determined level of tax compliance by SMEs. There was also a positive relationship between level of tax audit awareness and tax compliance by SMEs, with 85% of the respondents holding this view. It also was also evident that employee competence played a key role in influencing tax compliance by SMEs in Nairobi. An overwhelming majority seemed to agree that employee competence positively affected tax compliance by SMEs. The research generally concluded that each one of the three independent variables (predictors) had a significant influence on the level of tax compliance by SMEs. It clearly emerged out that tax audit dictated the understanding of small and medium enterprise owners on the need to be tax compliant. Taxpayer awareness was equally critical in determining the level of tax compliance by SMEs. This ensured that small and medium business owners acquired requisite knowledge regarding the need to pay their tax as required by law. Similarly, employee competence impacted positively on the general tax compliance by SMEs, as this further encouraged professionalism in firms and greatly helped them in meeting their corporate objectives. The study recommended that the government, through KRA, should liaise with the larger business sector to expand tax auditing to the SMEs sector to encourage all the players to always be tax compliant. It is also important for the government to enhance taxpayer awareness through effective platforms such as seminars, media adverts or roadshow campaigns for all business owners to understand the need for being tax compliant. Also, as has been evidenced through SMEs in Nairobi that employee competence was critical in tax compliance; the government should encourage all businesses in the SMEs sector to emphasize on investing on their staff for optimum performance.en_US
dc.identifier.urihttps://ikesra.kra.go.ke/xmlui/handle/123456789/2310
dc.language.isoenen_US
dc.publisherKESRA/JKUAT - Unpublished research projecten_US
dc.subjectTax Complianceen_US
dc.titleFactors Affecting Tax Complianceen_US
dc.title.alternativeCase of Small and Medium Enterprises in Nairobien_US
dc.typeThesisen_US

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