Taxpayer Education and Adoption of Alternative Dispute Resolution in Tax Disputes Moderated by Trust in Tax Authorities Among Medium and Large-Sized Enterprises in Nairobi-East District, Kenya
DOI:
https://doi.org/10.70619/vol6iss2pp53-71-771Keywords:
Taxpayer Education, Alternative Dispute Resolution, Medium and Large-Sized Enterprises, Stakeholder Sensitization, TrustAbstract
Alternative dispute resolution (ADR) offers an efficient and affordable way to handle disputes, yet its use in Kenya remains low. Despite being introduced in 2015, ADR has seen a sharp decline, resolving only 97 cases in the financial year 2024/2025. This study investigated the relationships among taxpayer education, stakeholder sensitization programs, trust in tax authorities, and the adoption of ADR in tax disputes among medium- and large-sized enterprises (MLEs) in Nairobi East District, Kenya. The study was informed by Diffusion of innovation theory, Theory of planned behaviour and institutional theory. An explanatory research design was adopted, and 198 active MLEs were targeted using the census approach. Data was collected using a structured questionnaire. A pilot test involving 10% of the 198 was conducted in Nairobi South. Data analysis included descriptive and inferential statistics. Findings showed that stakeholder sensitization programs (B = 0.362, p < .001) had a significant positive effect on adoption of ADR. Trust in authorities had a significant independent effect on ADR adoption (B = 0.279, p < .001). The moderator did not show any influence, and the interaction terms did not account for any added variation. The study concluded that stakeholder sensitization has a significant positive effect on ADR adoption, and trust in tax authorities independently supports this adoption. It recommends ongoing engagement with enterprise leaders, continuous awareness campaigns, and the provision of accessible, reliable information to strengthen the program's effectiveness. Future research can examine the impact of long-term sensitization programs across different regions and firms.
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