Tax Evasion in the Informal Sector in Kenya: Assessing the Adequacy of the Legal and Regulatory Framework
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Date
2020Author
Maritim, Jackline C
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
There is a huge potential for revenue in the informal sector and the government can
leverage on this to meet its yearly budgetary targets. For many years, the major source
of government funding in Kenya has been tax revenue. There is a need to maximize
revenue collection from both the formal and the informal sector. The overall objective
of this study is to investigate how the use of legal tools and framework facilitates the
bringing of the informal sector into the tax bracket and as a result combat tax evasion.
The study established that the causes of tax evasion within the informal sector is
attributed to: the lack of tax information, high illiteracy levels, poor record keeping,
poor management structures, the reluctance in enforcement of the existing legal
framework, anticipation of government benefits by the taxpayers and the perception
that the government misuses taxpayers’ money.. It is evident that the informal sector
portrays a huge potential for widening the tax base.
The government needs to formulate and employ strategies of moving the informal
sector to the formal sector by facilitating the transitioning of informal businesses.
Taxpayer education should be a priority to help change the narrative (the perception of
taxpayers within the informal sector) and investing in regulatory framework for
purposes of implementation of tax evasion laws alongside investing in digital
infrastructure.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
- School of Law [281]
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