The Effect of Desk Tax Audit Practice on Tax Revenue Collection among Medium and Large Size Enterprises in Kenya

Abstract

Purpose: Tax is a major issue of discussion for both developed and developing countries. For there to be significant progress in any nation, the government should look for ways of raising income to meet the needs of its citizens. The main objective of the study was to determine the effect of desk tax audit practice on Tax revenue collection among medium and large size enterprises in Nairobi region, Kenya. The study was guided by Lending credibility theory.

Methodology: The target population was 562 employees in the Medium Taxpayer Office and Large Taxpayers Office Nairobi region, out of which 234 was sampled, and 167 respondents managed to fill and return the questionnaires implying a 71.4% response rate. Primary data was collected using structured questionnaires that was filled by employees in Medium Taxpayers Office and Large Taxpayers Office in Nairobi region. The study employed an explanatory research design. Data was then analyzed using descriptive statistics, Pearson’s correlation &regression model and finally Multiple regression model.

Results: The study further found that Desk tax audit had a positive and significant effect on tax revenue collection β =0.329 p-value =0.0000<0.05.

Recommendation: Based on the findings, the government should consider strengthening desk tax audit practices to enhance tax revenue collection. Policies could be developed to ensure regular and comprehensive desk audits are conducted to identify and address tax compliance issues promptly.