INFLUENCE OF I-TAX ON PERFORMANCE OF TAX RETURN COMPLIANCE AMONG SMALL AND MEDIUM ENTERPRISES, CASE OF NAKURU CITY CENTRAL BUSINESS DISTRICT, KENYA
INFLUENCE OF I-TAX ON PERFORMANCE OF TAX RETURN COMPLIANCE AMONG SMALL AND MEDIUM ENTERPRISES, CASE OF NAKURU CITY CENTRAL BUSINESS DISTRICT, KENYA
Mohamud Abdirahim Bore - Master’s Degree in Finance, Mount Kenya University, Kenya
Dr. Ruthwinnie Munene - Lecturer, Mount Kenya University, Kenya
ABSTRACT
The purpose of the study was to establish the influence of the ITax system on performance of tax return compliance among taxpayers of Nakuru city CBD, Kenya. The objective of the study was to establish the influence of fines and penalties on performance of tax compliance in Nakuru city CBD. The study was anchored economic based deterrence theory. This study will be of great significance to the taxpayers and the tax authority as it will give information relevant for formulation of tax policy and tax reforms implementation as well as tax administration. The study was carried out in Nakuru city since it has a large number of businesses approximately above 1426 who are also eligible taxpayers. The study adopted descriptive research design. Data collection was done by use of structured questionnaires. Stratified sampling was used to sample individuals registered on I-Tax. Piloting was done in Naivasha town among employees working in the flower farms. Validity test was carried out through triangulation. Reliability test was carried through the test-retest method. The data was analyzed using SPSS to produce both descriptive and inferential statistics. Informed consent was issued to the respondents to ensure voluntary participation and ethical consideration was observed. From the findings the study concluded that there exists a positive and significant relationship between tax fines and penalties on tax compliance performance in Nakuru city CBD, Kenya with (r=0.607, p=0.000). The study recommends that Kenya Revenue Authority should make improvements to the iTax platform to make it more use friendly. This can be enhanced by carrying out I tax training to the tax payers through seminars, door to door and workshops to enable taxpayers understand the importance of tax compliance and what antecedents determine their compliance as well as Tax is an important source of revenue for the government and every administration.
