Factors influencing turnover tax compliance in the Kenya revenue authority domestic taxes department in Nairobi county
Abstract
Taxation is the avenue through which persons both corporate and individuals contribute towards
revenues of their country or tax jurisdictions they operate in. On the other hand taxation is the most
important avenue through which governments generate revenue necessary for development projects
and recurrent expenditure. This study sought to identify the factors influencing turnover tax
compliance in the Kenya revenue authority domestic taxes department in Nairobi County. The
researcher outlined a detailed literature review and identified the variables for this research to be
taxpayers‟ perception of the tax system, taxpayers‟ level of awareness, enforcement efforts by the
revenue authority and costs of compliance. A target population of 560 taxpayers was selected and
given the large population of taxpayers in Nairobi County, a total sample size of 56 was picked as
representative, to be the focus of this study. A descriptive survey design was used. Stratified sampling
technique was used to create a sampling frame ensuring that different and diverse types of entities
were included in the survey. Data was collected using self–administered questionnaires and an
interview guide. The collected data was analyzed using Statistical Package for Social Scientist
software and findings presented using tables. The Findings from the study reveal that all the identified
factors have a direct influence on the tax compliance efforts by taxpayers in the turnover businesses.
The perceptions of taxpayers towards the tax system greatly determine the level of compliance for
turnover tax. The findings suggest that taxpayers are not aware of their responsibilities; however, the
result also indicated that other factors like cost of compliance and complicated systems result into the
low levels of compliance. Taxpayer‟s perception of tax system is inclined to change due to changing
tax knowledge. This suggests that increased tax knowledge may have significant impact on perception
of tax system. The recommendations of the study are; K.R.A should undertake intensive and increased
sensitization of turnover, K.R.A should train their staff diligently on customer service, and K.R.A
should ensure all taxpayers who fall under turnover tax are registered. The insights of this research will
help address the factors influencing turnover tax compliance in the Kenya revenue authority domestic
taxes department in Nairobi County.
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- Faculty of Education (FEd) [5964]