The Influence of Electronic Tax Management Strategy and Compliance With Tax Return Regulations by Tax Payers at Kenya Revenue Authority

Abstract

The difficulties tax authorities experience in collecting income have been blamed for the present discrepancy between expected revenues and actual collections. Electronic tax administration is a crucial component of the Kenya Revenue Authority's (KRA) revenue collection plan, which is a public service. KRA has observed an increase in tax income with the implementation of iTax. Despite this, the treasury has failed to reach KRA's income goals. The purpose of the research was to determine the impact of an electronic tax management approach on Kenya Revenue Authority tax payers' compliance with tax return laws. In this study, ideas like the unified theory of technology acceptance and usage and dynamic capacities theory guided the research. This study used a case study methodology. In order to conduct this study, secondary data were used. After iTax installation, revenue collection increased statistically significant for the periods following iTax's introduction, according to this event analysis. Researchers found that before and after implementation of iTax, the rate of increase in tax revenue collection was higher than predicted, and the projected increase in tax revenue collection was higher before than after implementation of iTax. These results suggest that KRA tax rates rose more rapidly before than after the launch of iTax. The study findings further displayed that KRA has being generally meeting and surpassing it’s targets more after the implementation of iTax as compared to before the implementation of iTax. After the deployment of iTax, the research found that KRA's tax revenue collection returns had improved as a result of the platform's installation. In this way, iTax demonstrates that KRA's goals were met and exceeded in the early stages of its deployment. Policy recommendations are made to the government officials and policy formulators in the Treasury and the board of the Kenya Revenue Authority, to automate all revenue collection channels to boost tax revenue collection. Since KRA has commenced collecting revenue for the devolved governments, it should automate the revenue collection so as to optimize the tax revenue collection. Additional recommendations are generated to the government officials and policy formulators in the Treasury and the board of the Kenya Revenue Authority to utilize other strategies alongside automating tax xii payment services. Recommendations are also generated to the KRA management, consultants, and economists to estimate and base their projected tax revenue estimates and targets based on the automation of tax payment services. They should particularly be bullish about tax revenue collection when tax payment services have been automated. In addition, the KRA management should gauge automation of tax payment services levels to determine the level of tax revenue collection enforcement. Thus, during times of high levels of automation of tax payment services, they should increase the intensity of enforcement because more tax revenue can be obtained.