The Effect of Digital Tax Payment Platforms Integration on Turnover Tax Compliance Among Manufacturing Small and Medium Enterprises in the West of Nairobi, Kenya
DOI:
https://doi.org/10.70619/vol6iss3pp13-30-783Keywords:
Digital tax platforms, turnover tax, tax compliance, SMEs, Kenya Revenue Authority, e-tax systemsAbstract
This study aimed to assess the impact of integrating digital tax payment platforms on turnover tax compliance among small and medium-sized manufacturing enterprises (SMEs) in the West of Nairobi, Kenya. The implementation of digital payment services by the Kenya Revenue Authority (KRA), including e-Citizen, Mpesa, and bank transfers, is intended to make tax administration easier, less costly to comply with, and hence result in greater voluntary compliance among taxpayers. Nonetheless, even amid these reforms, SMEs' compliance with turnover tax has been inconsistent, casting doubt on whether digital integration can improve tax outcomes. Grounded on the Technology Acceptance Model (TAM) and Economic Deterrence Theory, the research adopted a descriptive design targeting 392 manufacturing SMEs registered under the turnover tax in the West of Nairobi. Random sampling, using the Yamane formula, was used to select 198 SMEs. Structured questionnaires were used as the primary instruments for collecting data. A total of 167 valid responses were analyzed using descriptive statistics, correlation analysis, and multiple regression techniques. The results showed a strong, positive, and statistically significant relationship between digital tax payment platform integration and turnover tax compliance. According to SMEs, the ease of payment, timely payment and filing, tax remittance accuracy, and record-keeping were improved by mobile payment methods. The regression results showed that digital platform integration was a significant determinant of variance in turnover tax compliance. The study finds that the effective integration of online tax payment systems is critical to increasing tax compliance among manufacturing SMEs. The study recommends that KRA intensify its efforts to enhance system reliability, interoperability, and taxpayer support to maximize the benefits of compliance.
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