The effects of tax amnesty on revenue growth in Kenya
Many developed as well as developing countries conduct tax amnesties as part of their fiscal program to improve revenue growth. Many states in the US have had repeated tax amnesties in space of ten years. However, the empirical evidence on effect of tax amnesty on revenue growth has not been conclusively documented after the tax amnesty. The objective of this research was to determine the effect of tax amnesty on revenue growth in Kenya. The study adopted a descriptive research design to explore on the effects of tax amnesty on tax revenue growth and the research relied on secondary data. The target population for the research included individual and corporate taxpayer’s data on revenue for periods with and without tax amnesty for the year 1992 to year 2010 as well as growth in GDP and inflation rates for the respective periods. Convenience sampling was used to select the period of research as period from year 1995 to 2009 because Kenya had a tax amnesty in year 2004 and therefore this afforded the opportunity to examine tax revenue growth before and after the tax amnesty. Regression analysis was used to evaluate the degree of relationship between tax amnesty and revenue growth and the findings presented in tables and graphs. The research found out that tax amnesty does not indeed have a positive effect on tax revenue growth after taking into account other factors like GDP and inflation that are likely to affect tax revenue growth. For there to be growth in revenue, tax amnesty needs to be followed by enforcements measures to ensure the benefits of the tax amnesty are realized both in the short and long-run.