The influence of tax incentives on effectiveness of non governmental organizations operations: a case of non governemental organizations in the water sector based in Nairobi, Kenya

Abstract

The Governments supports the Nongovernmental operations by providing a conducive operating environment. One of the measures undertaken by the Government is provision of tax incentives to enhance their operations in complementing the government in service delivery. This study aims at assessing the influence of tax incentives on the effectiveness Nongovernmental organization operations with specific reference to the NGOs in Kenya.

The tax conditions given for the tax incentives are looked at together with the legal frame work and the operating procedures involved namely the National Coordination Act of 1990, Income Tax Act Cap 470, Value Added Act Cap 470 and the East African Customs Management Act 2004. In the literature reviews the variables are looked at from the perspectives of different scholars who have Gone an in-depth analysis of the eff~ct of tax incentives on the operations of the NGOs.The literature review addressed each of the variables used in the study. The internal and external challenges to the NGO operations were looked at and also the opportunities created by them.

A survey using questionnaires was carried out on the sampled populations in Nairobi. The data collected was analyzed and interpreted using Pearson's correlation values. The findings were compared with the theoretical literature review given to establish the existing relation. The findings from the study confirmed that there is a significant relationship between the variables and concluded that tax incentives have an influence on effectiveness of NGOs operations.