Effect of Tax Invoice Management System on Value Added Tax Compliance Among Restaurants in Thika Town, Kenya
DOI:
https://doi.org/10.70619/vol5iss5pp56-66Keywords:
Tax Invoice Management System, Value Added Tax Compliance, RestaurantsAbstract
This is proven by KRA’s failure to meet its revenue targets for the last few years. This study sought to establish the effect of the Tax Invoice Management System on value-added tax compliance among restaurants in Thika town, Kenya. The theory that guided the study was technological determinism. The data collected from the questionnaires were analyzed through quantitative data analysis methods. The target population was 1,635 licensed restaurants in Thika. The sample size is 321 firms that are registered for VAT in Thika town. The response rate for the questionnaires issued was 76.0%, with 244 out of 321 participants providing complete responses, while 24.0% did not respond. The study found that the implementation of the Tax Invoice Management System (TIMS) had a positive and significant effect on VAT tax compliance among restaurants in Thika town, Kenya (β = 0.269, p = 0.000). The study recommends that the Government of Kenya strengthen policies supporting the adoption of the Tax Invoice Management System (TIMS) to enhance VAT compliance. Future studies could examine the role of taxpayer attitudes, enforcement mechanisms, and government incentives in shaping VAT compliance behavior.
References
Adams, C., & Webley, P. (2001, April). Small business owners' attitudes on VAT compliance in the UK. sciencedirect.com.
Alm, J., & Torgler, B. (2020). Do older firms comply more? The role of age in tax compliance behavior. Journal of Economic Behavior & Organization, 177, 1-15. https://doi.org/10.1016/j.jebo.2020.05.012
Bird, R. M., & Zolt, E. M. (2008, September). Technology and Taxation in Developing Countries: From Hand to Mouse. papers.ssrn.com. Retrieved 2022, from
De Simone, L., Mills, L. F., & Stomberg, B. (2020). Using IRS data to examine income shifting by multinational corporations. The Accounting Review, 95(1), 1-26. https://doi.org/10.2308/accr-52517
Gallemore, J., Maydew, E. L., & Thornock, J. R. (2020). The reputational costs of tax avoidance. Contemporary Accounting Research, 37(1), 1-30. https://doi.org/10.1111/1911-3846.12538
Kamer, L. (2022, August 1). Gross Domestic Product (GDP) growth rate from accommodation and restaurant services in Kenya from Q1 2019 to Q1 2022. statista.com.
Kariuki, E. (2013, September). Automation in Tax Administrations. Africa Policy Research Institute Limited, 4, 13. april-ssa.com.
King'ona, J. O. (2016). Factors Influencing Value Added Tax Compliance Among the Construction Firms in Kisumu County, Kenya. erepository.uonbi.ac.ke.
Kiring’a, E. S., & Jagongo, PhD, A. (2017, January). Impact of online tax filing on tax compliance among small and medium enterprises (SMEs) in Kibwezi sub-county in Kenya. journalcra.com.
Kleven, H. J., Knudsen, M. B., Kreiner, C. T., Pedersen, S., & Saez, E. (2021). Unwilling or unable to cheat? Evidence from a randomized tax audit experiment in Denmark. Econometrica, 89(3), 1-35. https://doi.org/10.3982/ECTA16973
KRA. (2020, September). Taxing the Digital Economy in Kenya. Kra.go.ke. KRA. (2022). What You Should Know About the Upgraded Electronic Tax Registers (ETRs). Kra.go.ke. LaMorte, W. W. (2022, November 03). Diffusion of Innovation Theory. sphweb.bumc.bu.edu.
OECD. (2004, October). Compliance Risk Management: Managing and Improving Tax Compliance. oecd.org
OECD. (2011). Supporting the Development of More Effective Tax Systems. oecd.org.
Singh, S. (2018, July 26). Sampling Techniques. towardsdatascience.com.
Slemrod, J. (2019). Tax compliance and enforcement. Journal of Economic Literature, 57(4), 904-954. https://doi.org/10.1257/jel.20181437
Smith, M. J. (1999). Middle Range Theory: Spinning Research and Practice to Create Knowledge for the New Millennium. Advances in Nursing Science, 21(4): 81- 91. Lin, E. (2018, January 7). “The social shaping of technology” — Donald MacKenzie and Judy Wajcman. medium.com.
World Bank. (2022, February 17). Innovations in Tax Compliance. worldbank.org. Zikmund, W. G., Griffin, M., Carr, J. C., & Babin, B. J. (2012). Business research methods (9th ed.). Australia: South-Western, Cengage Learning, 2012.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Njoroge Esther Wamaitha
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
