Effect of modes of taxpayer education on tax compliance among the small enterprises in Taita Taveta County, Kenya.
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Date
2019
Authors
Nyambu, James Kitogho
Journal Title
Journal ISSN
Volume Title
Publisher
KESRA/JKUAT - Unpublished research project
Abstract
Tax as a source of government revenue is a very critical strand in any state as it enables the government provide public goods and services to its citizens and undertake economic development projects. As a developing state, Kenya has a great share of the production sector being made up of Small and Medium Enterprises (SMEs) who in their nature can generate adequate revenue for the government, unfortunately, this is not so. Small and Medium Enterprises‟ non-compliance can be attributed to poor and often inadequate record keeping, weak financial and internal controls, absence of clear tax accounting guidelines, and more so inadequate knowledge and understanding of the tax rules and procedures among other reasons. The study aimed at assessing the effect of the various modes of Taxpayer education on tax compliance of Small enterprises in Taita Taveta County with focus on electronic mode of Taxpayer education, print media Taxpayer education, stakeholder engagement and customer care mode of Taxpayer education. The target population was the owners of small enterprises in Taita Taveta County. The target population was 900 small enterprises and the sample size for the study was set at 87 respondents. The study used primary data which was collected using pretested questionnaires to the owners of Small enterprises. Of the 87 questionnaires sent out, 79 were received back representing a response rate of 90%. Descriptive and inferential statistics were used in data analysis and interpretation. Presentation of the data and findings was done by way of tables. The study established that most businesses in Taita Taveta County are run by women and most businesses were in the nature of sole proprietorship. The study found that electronic mode of Taxpayer education, print media Taxpayer education, stakeholder engagement and customer care mode of Taxpayer education had statistical significance on Tax compliance with Customer care showing the strongest influence on Tax compliance with a Pearson correlation of 90.5%. Print media tax education showed a strong positive correlation of 78%, electronic taxpayer education showed a positive correlation of 65.6% with stakeholder engagement showing a correlation of 50.4% with tax compliance. The study further found out that majority of the respondents was not satisfied with the tax training offered by the Kenya Revenue Authority with some respondents stating to not knowing the existence of taxpayer education services offered by the revenue collection agency. Respondents suggested that Kenya Revenue Authority should be more proactive in its taxpayer education programmes by target taxpayers who are out of the main towns, have more frequent trainings and make follow ups after the trainings. The study recommends that the Kenya Revenue Authority should have a structured approach in its Taxpayer education aimed at reaching majority of the taxpayers who are not located in major towns. Further, the Ministry of Education should introduce taxpayers‟ education and try to include taxation course in the curriculum of all departments. This is because tax is one of the major sources of revenue for a government which is used in general to finance public expenditures and if tax education influences tax compliance attitude of tax payers, the tax course (similar to civics and ethics) must be provided as a common course for all.
Description
PROJ 336 NYA
Keywords
Tax compliance, Taxpayer education, Taxing Authority, Small Taxpayer