iTax and Revenue Collection By Kenya Revenue Authority In Western Region, Kenya
Abstract
Efficiency and accountability in taxation systems has heightened the clamour for modernization
of tax systems across the globe. However, despite the introduction of iTax in Kenya, the Kenya
Revenue Authority still continues to post revenues short of the treasury targets. The current
study sought to establish the effect of iTax implementation on revenue collection in Western
Region, Kenya. The study employed a correlational research design which was longitudinal in
nature as the study covered a period of five years. The study was guided by the following
objective; to establish the effect of iTax on revenue collection in Western Region, Kenya. The
current study was underpinned by The Neo-Classical theory, and the Unified Theory of
Acceptance and Use of Technology. This study made use of secondary data obtained from the
tax collections by KRA’s western regional offices covering the periods 2012-2016 calendar
years. Event study methodology was used to determine abnormal variations in revenue collected
before, during and after the implementation of iTax. Data gathered was coded and tabulated to
facilitate analysis using quantitative statistical packages for social sciences (SPSS) version 20.
Descriptive statistics included percentages and measures of central tendency. Paired t-test was
used to establish any significant differences in revenue collection before, during and after the
implementation of iTax. The study established that iTax implementation led to an increase in the
variability of the revenue return for the periods during, and after the implementation of iTax. In
particular, iTax implementation had a positive effect on the average quarterly revenue collection
for the period during and after its implementation. The findings suggest no significant difference
in the revenue collected in the Year 2012 (M= 1.1144 and SD=0.17161) and the year 2013
(1.1728, SD= 0.20067; t=- 1.141, p=0. 337). Nonetheless, there was a significant difference in
the revenue collected before the implementation of iTax (M=1.1436, SD=0.17955) and during
the implementation of iTax (M= 1.9126 and SD= 0.35404; t=- -7.436, p=0.005). In addition,
there was a significant difference in the revenue collected during the implementation of iTax
(M= 1.9126; SD= 0.35404) and after the implementation of iTax (M= 2.7182; SD= 0.29157; t=-
--4.863, p=0.017). Furthermore, there was a significant difference in the revenue collected
before the implementation of iTax (M= 1.1436; SD= 0. 17955) and after the implementation of
iTax (M= 2.7182; SD= 0.29157; t= -15.093, p=0.001). There was also significant increase in
abnormal revenues after iTax implementation (M= 0.8460 billion; SD= 0.33091; t=7.760;
p=0.004) over the period prior to its implementation (M= 0.00001; SD=0.17142. In sum, iTax
improves revenue collection. Revenue collection in Kenya has increased partly because of the
introduction of iTax as envisaged by the findings of the current study. As such, it’s imperative
for the Kenya Revenue Authority to develop strategies to increase the number of taxpayers who
embrace the iTax system through training and marketing.
Publisher
University of Nairobi
Subject
iTax and Revenue CollectionRights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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