Tax Payer Education and Tax Compliance Among Small and Medium Enterprises in Kenya: A Case of Motor Vehicle Spares Traders in Nakuru Town Suburb Area

Abstract

The level of tax compliance among the small and medium taxpayers in Kenya has been declining. The current study sought to determine the effect of tax-payer education on motor vehicle traders' tax compliance in the Nakuru Town suburb of Kenya. An explanatory research design was adopted. The target population for the study was 300 traders dealing in motor vehicle spares in the Suburb area of Nakuru town. A sample size of 150 traders was selected using a simple random sampling technique. The findings indicated a combined R square of 0.615. This shows that mainstream media education, social media education, KRA’s stakeholder’s education forums, and print media taxpayers education explain 61.5% of the tax compliance. The findings also indicated that print media taxpayers’ education (β=0.315, p=0.000), social media education (β=0.292, p=0.000), mainstream media education (β=0.205, p=0.003), and KRA’s stakeholders' education forums (β=0.184, p=0.003) had a positive and significant effect on tax compliance among motor vehicles spare traders in the Suburb area of Nakuru town, Kenya. The study concluded that tax-payer education contributes significantly to tax compliance. The study recommends the inclusion of tax education in Kenya's primary and education curriculum to prepare young learners who are future taxpayers on the importance of tax compliance. The study also recommends that the KRA needs to scale up its social media engagement for the enlightenment of taxpayers since the use of social media platforms is very convenient given the advent and advantages brought about by the use of smartphone technology.