The effect of taxpayer knowledge of excise tax laws on tax compliance: The case of water bottling companies in Nairobi County
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Date
2019
Authors
Kiogora, Vivian
Journal Title
Journal ISSN
Volume Title
Publisher
KESRA/JKUAT - Unpublished research project
Abstract
Excise duty refers to tax charged on given products and services made locally or imported, on fluctuating rates indicated in the Excise Duty Act 2015. In Kenya, it is charged in both given rate where a particular measure of expense is charged per unit of measure on an excisable item, and promotion valorem rate where a rate of duty is charged on the estimation of an excisable item. Compliance of tax is characterized as how much the taxpaying network meets the tax commitment as set out in the fitting legitimate and administrative arrangements (Maxwell, 2003). He includes that agreeable tax make auspicious, appropriate and exact statement to the expense authority and intentionally settle all the due duty liabilities. Tax payer consistence relies upon financial impetuses installed in the assessment structure and the adequacy in distinguishing and punishing resistance. At the edge, individuals participate in tax avoidance when the normal advantages (lower charges) are equivalent to the normal costs. Despite excise duty contributing a lot to the revenue collection compliance to the excise tax laws has been very challenging. Thus,
11 the main objective of the study was to determine the effects of taxpayers’ knowledge on the level of Excise duty compliance among the water bottling companies in Nairobi County. The study employed a descriptive research design. Descriptive approach was integrated with survey design so as to collect comprehensive qualitative and quantitative data that enriches the outcome of the study. The study targeted all the water bottling companies in the Nairobi County as the population of the study. Nairobi County is composed of 17 sub counties and an estimated number of 120 water bottling companies (KRA, 2018). The study collected primary data. Questionnaires were used with close-ended questions for qualitative and quantitative data respectively. Analysis was done using the SPSS software. The study adopted regression analysis to confirm the effect of tax knowledge of excise tax laws on tax compliance. The study concluded that the electronic media education in Nairobi County include television, radio and
social media. This had been used to inform the tax payers of the excise tax laws on tax
compliance. The findings led to conclusion that print media education improved tax compliance. Print media education informed the tax payers of the excise tax laws on tax compliance. This had increased tax compliance and provided greater knowledge among tax payers. From the findings, it can be concluded that KRA does not do regular stakeholders sensitization. The respondents had poor knowledge of excise tax laws on tax compliance.
Description
Keywords
Ad valorem rate, Revenues, Tax