The impact of using electronic tax register on Value added tax compliance in Kenya: A case Study of classified Hotels in Nairobi

Abstract

The main objective of the tax reforms and modernization program embarked on by Kenya was to enhance compliance with tax regulations. This would be achieved through tax policies aimed at ensuring effectiveness of tax mechanism and increase in revenue. One measure the government took was to introduce electronic tax registers across all industries. This research intended to establish the impact of Electronic Tax Registers on VAT compliance among classified hotels in Nairobi. The objectives of the study were to determine the impact of Electronic Tax Registers on VAT compliance among classified hotels in Nairobi and to identify factors affecting VAT compliance among classified hotels in Nairobi. This study adopted the survey research design which was most appropriate as it entailed gathering of both primary and secondary data from classified hotels in Nairobi. The population consisted of all classified hotels, which were registered for VAT from year 2004 to 2008. The research study used both primary and secondary data. Primary data was obtained through selfadministered questionnaires.The research findings indicated that there was an increase in VAT declared with the introduction of Electronic Tax Registers. ETR machines can then be deemed to enhance VAT collection resulting from more accurate VAT reporting. It can be concluded that the classified hotels have adopted and complied with the requirements of VAT. The study recommends that the tax office should therefore strive to ensure full adoption of the ETR machines since they increase the VAT declared