Effect of Religiosity on Turnover Tax Compliance among Agribusiness Small and Medium Enterprises in Bungoma Town, Kenya
DOI:
https://doi.org/10.70619/vol6iss1pp83-94-732Keywords:
Religiosity, Turnover Tax Compliance, Agribusiness Small and Medium EnterprisesAbstract
Kenya still suffers from underperformance in revenue collection, and over the years, our country has not met its revenue targets either. The revenue yield is still low. This is despite the government's significant investment in transforming the tax system through various policies. The purpose of this study was to establish the effect of religiosity on turnover tax compliance among agribusiness Small and Medium Enterprises in Bungoma Town, Kenya. The theories that guided this study were the planned behaviour theory and the ability-to-pay theory. The study employed an explanatory research design with a sample size of 387 Small and Medium Enterprises in Bungoma Town. The researcher distributed the questionnaire to a sample of 387, and 325 respondents completed it, representing 84% of the targeted sample. Primary data was obtained using a structured questionnaire. Descriptive statistics covered means and standard deviations, and inferential statistics, including Pearson’s correlation and regression analysis. The study found that religiosity had a positive and significant effect on turnover tax compliance among agribusiness SMEs in Bungoma Town, Kenya (β = 0.183, p = 0.031). The government is recommended to incorporate religiosity into its tax compliance strategies by promoting ethical and moral aspects of taxation. This could involve engaging with religious leaders and institutions to underscore the moral obligation to pay taxes as a civic duty. Future studies may examine the influence of cultural factors on tax compliance with turnover taxes.
References
Ajzen, I. (1985). From intentions to actions: A theory of planned behavior. Berlin: Heidelber, New York: Springer-Verlag.
Allingham, M., & G Sandmo, A. (1972). Turnover Tax Evasion: A Theoretical Analysis. Journal of Public Economics. Philadelphia: North-Holland Publishing Company.
Baron, R. M., & Kenny, D. A. (1986). The moderator–-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173–1182. https://doi.org/10.1037/0022-3514.51.6.1173
Basri, L. (2014). Tax Administrations and Small and Medium Enterprises (SMEs) in Developing Countries, Consultant Small and Medium Enterprise Department, World Bank Group, July 2005.
Baurer, L. (2005). Tax Administrations and Small and Medium Enterprises (SMEs) in Developing Countries, Consultant Small and Medium Enterprise Department, World Bank Group, July 2005.
Bird, M. & Slack, E. (2002). Land and property taxation: A review. In the Workshop on Land Issues in Latin America and the Caribbean. Citeseer.
Camp, W., Troutman, S., & O'Bryan, D. (2001). An expanded model of taxpayer compliance: Empirical evidence from the United States and Hong Kong. Journal of International Accounting, Auditing and Taxation.
Capanna, A., & Englebrecht, D. (2013). An investigation of the effect of detection risk perceptions, penalty sanctions, and Turnover visibility on tax compliance. The Journal of the American Taxation Association.
Collins, L. (2007). “Attitude towards Business Ethics: Examining the Influence of Religiosity, Gender, and Education Levels.” International Journal of Marketing Studies, vol. 2(1), pp. 225–32
Creswell, J (2007). “Research design: Qualitative, Quantitative, and Mixed Methods Approaches”, 2nd ed. London: Sage Publications.
Creswell, J. (2009). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches. Sage Publication (3rd Ed.). Thousand Oaks, California: Sage
Dejene. (2021). The effect of audit rates on the federal individual Turnover tax. National Tax Journal.
Due, Ramli, R. (2018). Perception of justice, trust, and tax compliance behavior in Malaysia. Kasetsart Journal of Social Sciences.
Faizal, M., Palil, R., Maelah, R. & Ramli, R. (2017). Perception on justice, trust, and tax compliance behavior in Malaysia. Kasetsart Journal of Social Sciences.
Field, A. (2018). Discovering statistics using IBM SPSS Statistics (5th Ed.). Sage.
Fincham, J. E. (2008). Response rates and responsiveness for surveys, standards, and the Journal.
Genee, S., & Alley, C. (2020). Tax compliance, self-assessment and tax administration. Journal of Finance and Management in Public Services, 2(2), 27-42
Hilenbrand and Safriansyah (2017). “Sustainability Report Dan Nilai Perusahaan Di Bursa Efek Indonesia,” J. Ilm. BISNIS Dan Keuang., vol. 7, no. 1, pp. 21–30, 2017
Johnson & Scheider, F. (2001). Everyday representations of and Tax Flight: Do not legal differences matter? Journal of Economic Psychology, vol. 24, 535-553
Kamela N. (2020). Dimensionality Reduction Using Factor Analysis Author Downloaded from Griffith Research Online
Kirchler, E. & Wahl, I. (2010). Tax Compliance Inventory TAX-I: Designing an inventory for surveys of tax compliance. Journal of Economic Psychology, (31)3, 331–346.
Kirchler, E., Hoelzl, E., & Wahl, I. (2008). Enforced versus voluntary tax compliance: The ‘‘slippery slope’’ framework. Journal of Economic Psychology.
Neumark, P. (2018). Determinants of personal tax compliance. Accessed on 4th July, 2024, from
Norzilah, M. (2016). Tax Awareness Moderates Knowledge and Modernization of Tax Administration on Tax Compliance. Survey on MSMEs taxpayers in South Tangerang City, Indonesia.
OECD (2006a), Strengthening Tax Audit Capabilities: General Principles and Approaches, Information note, October 2006, Tax Administration Compliance Sub-group, available at < http://www.oecd.org/dataoecd/46/18/37589900.pdf>, accessed on 15th July 2024.
Safin (2021). Sales tax compliance and its determinants in Malaysia. Advanced International Journal of Banking, Accounting and Finance
Sandford, C., Godwin, M., & Hardwick, P. (1989). Administrative and Compliance Cost of Taxation. Birmingham: Fiscal Publications.
Slemrod, J., Blumenthal, M. and Christian, C. (2001). Taxpayer Response to an Increased Probability of Audit: Evidence from a Controlled Experiment in Minnesota, Journal of Public Economics, 79(3): 455-483
Torgler, B. (2007). Tax compliance and tax morale: A theoretical and empirical analysis. Edward Elgar Publishing
Wahl, I., Kastlunger, B. & Kirchler, E. (2010). Trust in Authorities and Power to Enforce Tax Compliance: An Empirical Analysis of the “Slippery Slope Framework”. Law & Policy
Worthington, F., & J (2019). The Optimal Threshold and Tax Rate for SMEs. IMF Working Papers. 19. 1. 10.5089/9781498312295.001.
Yovanta. E. (2020). Effects of supervision on tax compliance: Evidence from a field experiment. Economics Letter
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Kizito Wangila Masinde, Marion Nekesa, Muturi Kabete
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
