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Tax is a very important aspect in any country. Revenue collected from taxes enables a country to provide services for its citizens and also development of its economy. However, Kenya does not collect as much revenue as it should. SMEs in particular have the potential of generating a lot of revenue for the government but this is not the case. This poses a significant problem to the government and the country’s growth as a whole. Therefore, this study aimed at assessing the effect of taxpayer education on tax compliance in Kenya, the case of SMEs in Nairobi CBD. The study established the effect of electronic taxpayer education, print media tax payer education, and stakeholder engagement on tax compliance. The target population was SMEs in Nairobi CBD Tax area. The study object was SMEs conducting business within Nairobi CBD. Data was collected by administration of pretested questionnaires to the owners of SMEs business. Data was analyzed using both descriptive and inferential statisti.
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The success of KRA largely depends on the efficiency and efficacy of ITAX in increasing tax compliance and in closing tax evasion loopholes. Currently ITAX has over 2 million subscribers. This figure is expected to keep increasing as KRA keeps stepping up its awareness drive. KRA has extended the ITAX support system to about 22 Huduma centers in 13 counties offering easy access to tax services. The web enabled system is expected to bring down the cost of tax compliance in logistics. This is part of KRA's mission to attain global best practices in tax collection, and the taxman intends to benchmark against nations that have fully automated their systems, including the US. However, tax compliance has continued to be below expectation and revenue targets are not being met. The aim of this study was to establish the effect of I-Tax on tax return compliance in Nakuru town hence, a descriptive research enabled data collection from the population. The unit of analysis for the study was any individual taxpayer in Nakuru that has registered themselves with the Kenya Revenue Authority. According to domestic taxes report 2016 Nakuru town CBD had registered approximately 50,000 taxpayers on ITax. Individual taxpayers who are the majority among the registered groups of taxpayers were more suited for the study because they stand to accrue more benefits by adopting electronic filing since it will save them on cost and time used in tax compliance. .A sample of 50 individual taxpayers was selected for the study. Selection was done using stratified random sampling. Stratification was done on the tax payers based on whether they are registered on ITax or not. The sample size chosen was a factor of available time and resources to carry out the research. In conclusion, it was established that majority of Nakuru town taxpayers are willingly registered online with ITax.77.8% file their own taxes individually at their own convenience. The rate of compliance is relatively high at 88% of tax payers meet their tax obligations before the deadline. Among those that have ever requested for a tax compliance certificate from KRA, 76% were given while 24% were denied. Those denied TCC confirmed that the reason for denial was because of pending penalties from periods of not filing returns. Among the taxpayers that have ever suffered a penalty, 100% of them do not need to be reminded to file their returns anymore. This can be concluded to mean that the fines and penalties have increased the level of tax compliance by deterring noncompliance. Taxpayers are aware that not complying will result in fines and penalties and are therefore more vigilant in ensuring that they meet all their tax obligations on time.
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EFFECT OF INFORMATION TECHNOLOGY ON TAX COMPLIANCE BY KENYA REVENUE AUTHORITY IN NAIROBI, KENYA
With technology aspects being implemented or being in plan of implementation, the study sought to determine the effect of information technology by Kenya Revenue Authority on tax compliance in Nairobi, Kenya, and more so, the effect of iTax on tax compliance; the effect of big data analytics on tax compliance; and the effect of blockchain technology on tax compliance. With the research objectives, the study analysed the theoretical and empirical literature, with the theories used being diffusion of innovations theory, technology acceptance model, and united theory of acceptance and use of technology. The study findings indicated that in general, information technology has an effect on tax compliance i.e taxpayers’ registration, filing of returns, and income declaration. The study also found that iTax system has an effect on tax compliance to a very great extent and also well accepted by users, while data analytics and blockchain technology have an effect on tax compliance to a great extent and also the acceptance of the technologies are well accepted. Regression analysis indicated that iTax system and big data analytics had significant effect on tax compliance while blockchain technology had no significant effect on tax compliance. The study recommended that proper training needs to be done on new information technologies and also implement change management so as they can be effective. It also recommended that the government needs to create favourable policies to enable data privacy for users.
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International journal of scientific and research publications
This study aimed at examining the contribution of iTax system as a strategy for revenue collection at Kenya Revenue Authority, Rift Valley Region, Kenya. The study was guided by the following hypothesis: Ha1:There is a contribution of online taxpayer registration on revenue collection at KRA Rift Valley Region ;Ha2: There is a contribution of online tax return processing on revenue collection at KRA Rift Valley Region ; Ha3: There is a contribution of online compliance and monitoring activities on revenue collection at KRA Rift Valley Region.; Ha4: There is a contribution of electronic tax payments on revenue collection at KRA Rift Valley Region.The study was guided by Resource Based Theory. The study employed correlational research design. The target population was the domestic taxes department employees at KRA Rift Valley Region.
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IOSR Journal of Business and Management
