Effect of Tax Amnesty On Rental Revenue Collection: A Case Study of South of Nairobi
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Date
2018
Authors
Mbithe, Jacinta
Journal Title
Journal ISSN
Volume Title
Publisher
KESRA/JKUAT - Unpublished research project
Abstract
Tax revenue remains the most significant source of finance for both developing and developed countries. Numerous developing countries have conducted tax amnesties in their fiscal policy to promote revenue collection. Taxation is the principal source of government revenue for budgetary purposes. Tax amnesty is a limited-time opportunity for a specified group of taxpayers to pay a defined amount, in exchange for forgiveness of a tax liability (including interest and penalties) relating to a previous tax period or periods and without fear of criminal prosecution. It typically expires when some authority begins a tax investigation of the past-due tax. Tax amnesty only collects taxes in arrears previously undeclared. This measure helps to boost short term revenue collection for the governments but does not affect long term compliance. It therefore acts as debt management strategy in addition to helping the government collects the overdue taxes to finance budgets and reduce deficits. ). A number of scholars have researched on the subject of the use of tax Amnesty as a tool of expanding the tax base of an economy. Kwatemba, (2016), study on the impact of tax amnesty on revenues in Kenya, concluded that through the amnesty, tax evaders are encouraged to pay their dues. . A descriptive study was appropriate for this study as it sought to portray accurately the characteristics of a particular situation or a group. The target population was 8000 landlords who are earning rental income both compliant and non-compliant. The analysis was both descriptive and inferential. The descriptive analysis involved frequencies and percentages. Regression analysis and correlations was conducted to determine the relationship between the dependent variable and the independent variables of the study. The findings of the study reveal that effective tax education can change the attitude and perception of property owner towards tax compliance and that the the KRA as an administration body should reducing taxpayer burden by simplifying the tax laws and administration. There is a positive correlation between the variables of the study as shown by the 47.1% while 22.2% of variations in the dependent variable can be explained by changes in the independent variables hence, the remaining 77.8% is representative of other factors not accounted for in the study. The study therefore recommends that, KRA ought to create a database through agents who collect data relating to buildings and their owners and embrace enhanced recovery measures for charges over properties.
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Keywords
Tax Amnesty, Rental Income