Effect of Itax System On Vat Compliance Among Small and Medium Enterprises in Eldoret Town.
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Date
2022-09-01
Authors
MUTUKU, ERIC
Journal Title
Journal ISSN
Volume Title
Publisher
KESRA/JKUAT - Unpublished research project
Abstract
Automation of revenue collection system involves investing in modern technologies for example: ICT in order to upgrade the revenue system to achieve The general objective of this study was to examine the effect of iTax system on VAT compliance among SMEs in Eldoret town. The study was guided by the following specific objectives: - to assess the effect of SMEs technical skills, to find out the effect of SMEs training on VAT compliance among SMEs in Eldoret town and to establish the effect of Tax compliance costs on VAT compliance among SMEs in Eldoret town. The study employed descriptive research design. The study target population was 100 registered SMEs in Eldoret town. This study employed primary data collected through questionnaires. A pre-test on a different sample was carried out to give a Cronbach’s alpha greater than 0.7 for all the variables as a rule of thumb. Data analysis was conducted by use of descriptive statistics and inferential statistics using Standard statistical techniques including Pearson correlation coefficient and regression analysis employed in the analysis. All the analysis was conducted using the statistical package for social sciences (SPSS Version.24). Analysis of variance (ANOVA) was to establish if there is a statistical significance between the observed and expected values with the Pearson Chi square giving the degree significance of the relations. The study findings indicated that VAT compliance had strong positive correlation with SMEs technical skills, SMEs training and Compliance costs at 0.332, 0.421 and 0.357 respectively. These results show that in terms of statistics, SMEs training have more statistical effect on VAT compliance. The study recommended that to enhance compliance there is need to intensify SMEs technical skills in terms of increasing the number of sessions and broadening coverage to include tax consultants. This will enlighten the taxpayers on existing law and any other tax liability. This will also provide a forum for taxpayers to air their complaints and or compliments. There is need to continuously train technical staff to keep abreast with the tax law and any other changes therein. The SMEs should be encouraged to improve their bookkeeping by offering incentives, such as application of a lower presumptive tax rate for small businesses meeting certain recordkeeping standards and the government should also engage the small holders in sensitization forums on how to reduce the cost associated with tax compliance
Description
Tax Administration
Keywords
VAT Compliance, Small and Medium Enterprises