Journal of Finance and Accounting

The Effect of Social Norms on Value Added Tax Compliance among Small and Medium Enterprises in Embu Town

2024-08-06T06:55:48+00:00

Despite the increasing need to raise the level of revenue collection, Kenya still faces the challenges of low tax compliance. The broad objective of the study was to determine the effect of social norms on value tax compliance among small and medium enterprises in Embu town, Kenya. The study was guided by social influence theory. The study adopted an explanatory research design and targeted a population was 1050 small and medium enterprises in Embu town. A sample size of 290 was drawn from this population and the response rate was 74%. Primary data collection was employed using closed structured questionnaires from study's objective. The data was analyzed using descriptive, inferential statistics and multiple linear regression analysis. A correlation analysis conducted before testing for coefficients shows that there was a positive and significant linear relationship between social norms and value tax compliance r=0.696. The coefficient table indicates that social norms have a positive effect on VAT compliance β= 0.138 (p=0.006<0.05). Based on the findings the study recommends that Kenya Revenue Authority integrate insights from behavioral economics into tax compliance theories. Explore how psychological factors such as social norms can be incorporated into models predicting taxpayer behavior. Further research may be conducted to investigate the effect of technology on VAT compliance.

Effect of Bank Size on Earnings Retention for Investment by Commercial Banks in Kenya

2024-08-17T07:26:20+00:00

The Kenyan economy has continued to register dismal performances in the last few years and banks can play a facilitative function because of their intermediary role. The study sought to find out if the size of a commercial bank has any influence on its level of earnings retention for investment. The retention of earnings by a bank each financial year can have critical importance because it provides a source of funds for investment. The findings of the study are helpful to the management of commercial banks in education to shareholders. The study was anchored on the pecking order theory. The bank size parameters were cash at Central Bank of Kenya and property assets, net borrowed funds, investor funds, and the paid dividend. Though the total banks' population was 39, the study involved 36 banks as units of analysis. To test the impact of size on earnings retention in commercial banks in Kenya, a linear regression model was run. Analysis of the data revealed that 83 % of banks’ earnings retention is influenced by cash at CBK and property assets, net borrowed funds, investor funds, and paid dividends. The results pointed out that, cash at CBK and Property assets, net borrowed funds, and investors’ funds have a positive significant impact on earnings retention while paid dividends have an insignificant impact on earnings retention. Any commercial bank intending to expand its operations by use of retained earnings should work towards increasing variables with significant positive influence or decreasing the parameters with significant negative influence. By this, the commercial banks in Kenya will maximize utilization of the cheapest source of funds for investment and this will also lead to increased earnings due to reduced expenses related to capital acquirement from other sources.

Effect of Savings Impediments on the Performance of Selected Saccos in Nairobi County, Kenya

2024-09-22T18:00:15+00:00

Purpose: This study sought to assess savings impediments on performance of select SACCOs in Nairobi County, Kenya. The objectives were to examine the effects of income level on savings impediments on performance of SACCOs; to analyse the effect of interest rate on Performance of SACCOs; and to examine the influence of credit mechanisms on Performance of SACCOs in Nairobi County, Kenya.

Methodology: The study was guided by a cross-sectional research design with the target population comprising of officials of five selected SACCOs. A sample size of 72 respondents was drawn from the target population. The results show that income level significantly affects the performance of SACCOs (p<0.05).

Results: Results between interest rate and performance of SACCOs show that interest rate had a negative and significant influence on the performance of SACCOs (p<0.05). Finally, the results show that credit mechanisms had a positive and significant effect on the performance of SACCOs (p<0.05).

Conclusion: The study concluded that income level, interest rate, and credit mechanisms had a significant impact on SACCO performance in Nairobi County. The study recommends that the SACCOs should ensure that target mechanisms should be put in place to attract members with diverse incomes. SACCOs should establish clear policies and procedures for managing interest rate risk within the SACCOs. SACCOs should ensure compliance with regulatory requirements governing credit operations.