Effect of System Automation on Excise Duty Compliance among Cigarettes Importers in Kenya
DOI:
https://doi.org/10.70619/vol4iss1pp28-37Keywords:
System Automation, Excise Duty Compliance, Cigarettes ImportersAbstract
Excise duty compliance remains low in many economies around the world, with revenue authorities failing to achieve their annual targets. The main objective of this study was to determine the effect of system automation on excise duty compliance among cigarette importers in Kenya. The study was guided by diffusion of innovations theory. The study employed an explanatory research design that involved the use of structured questionnaires in collecting primary data. The target population was 21 cigarette importers in Kenya. Data was collected on a 5-point Likert scale questionnaire. Descriptive statistics were presented in tables and charts. Regression analysis was used to determine the relationship between the study variables. The study found that system automation (β=0.215, P=009) has a positive and significant effect on excise duty tax compliance. The study concluded that system automation contributes significantly to improved excise duty compliance among cigarette importers in Kenya. The study recommends that the management of KRA should come up with measures that will lead to an increment in system automation for registration, filing, and payment of excise duty tax. The findings that system automation has a positive and significant effect on excise duty tax compliance also serve to further the diffusions of innovations theory which explains the passage of a new idea through stages of adoption by different people who participate in or begin using the new idea.
References
Andrejs, S., Valters, K., & Roberts, Š. (2017). Impact of changes in excise tax on the financial performance of alcoholic beverage manufacturing firms in Latvia. Journal of Financial Economics, 10(6), 23-30
Budu, J. (2020). Disruptive technology adoption in developing countries: The case of Uber in Ghana. In Handbook of Research on Managing Information Systems in Developing Economies (pp. 51-69). IGI Global.
Caitlan, R., & Walbeek, V.C. (2016). How does a change in the excise tax on alcohol manufacturing firms in South Africa? The American Economic Review, 10(3), 273- 277.
Ibraimi, S. (2018). Performance determinants of manufacturing firms: Analysis from a Strategic Management Perspective. International Journal of Academic Research in Economics and Management Sciences, 3(2), 92-112
Irefe-Esema, J., & Akinmade, B. (2020). Automation and Tax Compliance: Empirical Evidence from Nigeria. American Journal of Theoretical and Applied Business, 8(3), 45-58.
Lee, K., Kim, S., & Park, M. (2019). The impact of workforce competency on financial performance in the manufacturing sector: A cross-sectional analysis. Journal of Applied Business Research, 42(3), 215-228
Linegar, D. J., & Walbeek, V.C. (2018). The effect of excise tax increases on cigarette prices in South Africa. Public Finance Review, 20(4), 65–71.
Liu, L., Schmidt-Eisenlohr, T., & Guo, D. (2021). Tax System and Tax Avoidance: Evidence from Linked Trade-Tax Statistics in the United Kingdom. Review of Economics and Statistics, 102(4), 766-778.
Mahangila, W. (2017). The impact of tax compliance costs on tax compliance behaviour. Journal of Tax Administration, 3(1), 57-81.
Manalastas, P. T. (2018, November). Using Technology for Innovation: The Case of Wildsound and Dolby Atmos. In The 6th National Business and Management Conference (Vol. 2345, p. 344).
Mashiri, E., & Sebele-Mpofu, F. Y. (2017). Illicit trade, economic growth, and the role of customs. World Customs Journal, 10(3), 11-20.
Mugenda, O. M., & Mugenda, A. G. (2008). Research methods: Quantitative and qualitative approaches. Acts Press.
Mukuwa, V., & Phiri, J. (2019). The effects of e-services on revenue collection and tax compliance among SMEs in developing countries: a case study of Zambia. Open Journal of Social Sciences, 8(1), 98-108.
Munyoro, G., Chiinze, B., & Dzapasi, M. (2016). The effects of excise duty on the profitability and growth of small manufacturing firms in Zimbabwe. Africa Development and Research Institute (ADRRI) Journal, 25(10), 25-34.
Muriithi, M. K., & Moyi, E. D. (2017). Tax reforms and revenue mobilization in Kenya. Nairobi.
Nshimirimana, J. F., & Twesigye, D. (2022). Assessing the impact of the e-tax systems on small and medium taxpayers’ tax compliance in developing countries. A case study in Rwanda. The Strategic Journal of Business & Change Management, 9 (1), 488 – 453
OECD (2016), Measures of Tax Compliance Outcomes: A Practical Guide, OECD Publishing, Paris, https://doi.org/10.1787/9789264223233-en.Taxpayers’
OECD (2017) The International and Ibero-American Foundation for Administration and Public Policies (FIIAPP) (2017), Building Tax Culture, Compliance and Citizenship: A Global Source Book on Taxpayer Education, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789104205154-en
OECD (2021) Corporate Tax Statistics: Third Edition, OECD Publishing, Paris, https://www.oecd.org/tax/tax-policy/corporate-tax-statistics-database.htm
Preece, R. (2017). The effective contribution of excise taxation on non-alcoholic beverages to government revenues and social objectives: a review of the literature. World Customs Journal, 7(1), 21-38. Revenue authority. http://erepo.usiu.ac.ke/bitstream/handle/11732/52/proj.pdf?sequence=1&isAllowed=y
Rogers, E. M. (1983). Diffusion of Innovations, Free Pass.
Rogers, E. M., Singhal, A., & Quinlan, M. M. (2014). Diffusion of innovations. In An integrated approach to communication theory and research (pp. 432-448). Routledge.
Scholes, M. S., Wolfson, M. A., Erickson, M., Maydew, E. L., & Shevlin, T. (2019). Taxes and Business Strategy. Upper Saddle River: Pearson Prentice Hall
Vagnani, G., Gatti, C., & Proietti, L. (2019). A conceptual framework of the adoption of innovations in organizations: a meta-analytical review of the literature. Journal of Management and Governance, 23(4), 1023-1062.
Watson, R., & Seidel, S. (2018). Three strategies for information systems research in the presence of an efficient knowledge market.
Xiaoyan, H. (2022). Empirical research on the dimensions division of organizational innovation in the manufacturing enterprise. Вопросы инновационной экономики, 12(2), 995-1008.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Pauline Talaso Lito, Bruce Ogaga, John Tarus
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
