Effect of Use of Itax on Corporation Tax Compliance by Medium Corporate Taxpayers in Kenya

Abstract

iTax is a computer based application system that furnishes a fully-integrated and automated solution for administration of government revenue enhancements. iTax is also used as data bank, monitoring mechanism and control over all taxpayers. iTax is a convenient and efficient way of administering revenue collection because it is a fully integrated modular system. It was introduced in Kenya by Kenya Revenue Authority (KRA) in October 2011, as a system for computing, assessment, collection and accounting for state revenues. It enables the taxpayer to make pin registration online, file returns, make payment booking to allow payments through the bank and also allow the taxpayer to view his/her ledgers concurrently therefore make inquiries and monitor his/her accounts on real time basis. It aims to make taxpayer adherence to KRA regulations easy and remove the cost of visiting KRA offices, enhance tax collection and present taxpayers with a platform that enhances their compliance. This research project aimed to investigate effect of use of iTax on corporation tax compliance by medium corporate taxpayers in Kenya. The study was guided by the following objectives; to determine the relationship between the use of iTax (technology) and corporation tax compliance on medium corporate taxpayers in Kenya and to determine the effect of selected environmental variables on corporation tax compliance by medium corporate taxpayers. The research used a descriptive contrive on medium corporate taxpayers in Kenya. Data collection was done through a structured questionnaire that was dropped or scanned to the taxpayers. The study population was 1507 taxpayers. 75 taxpayers were selected from the population for this study. Data from the field was analyzed in SPSS. The findings showed that use of iTax led to enhanced compliance by medium taxpayers in Kenya. The level of compliance was found to be so high that it calls for further need to investigate why, probably by the use of an interview guide.