Journal of Finance and Accounting

Effect of Systems Automation on Turnover Tax Compliance Among Small and Medium Enterprises in Eldoret City, Kenya

2026-03-18T08:07:15+00:00

Systems automation has emerged as a key driver of efficiency and transparency in tax administration processes. In Kenya, these technological advancements are particularly relevant for SMEs, who often face challenges in meeting tax obligations. This study, therefore, evaluates the effect of systems automation on turnover tax compliance among Small and Medium Enterprises (SMEs) in Eldoret City, Kenya. The Economic Deterrence Theory guided the study. The study adopted a cross-sectional explanatory survey. The target population comprised all 24,416 owners of registered SMEs in Eldoret City, with a sample size of 394 calculated using Yamane’s formula. The study employed a stratified random sampling technique to select respondents from SMEs in Eldoret City. The study used questionnaires as a data collection tool. Pre-testing of research instruments was achieved through a pilot study in Nakuru County. questionnaire. To assess the questionnaire's validity, the researcher evaluated content validity through expert reviews. To ensure reliability, the study used a Cronbach’s alpha above 0.7 to assess internal consistency. The study used SPSS version 25 for data analysis. The collected data were analyzed using both descriptive and inferential statistics. The findings indicated that systems automation and turnover tax compliance among SMEs in Eldoret City, Kenya, were positively and moderately correlated (r = 0.736**, p < 0.01). The β coefficient for linear regression indicates that system automation (β1 = 0.450, p < 0.05), implying that a unit increase in system automation is associated with a 0.450-unit increase in turnover tax compliance among SMEs in Eldoret City. The study concludes that automated systems can be really effective in enhancing turnover tax compliance among SMEs in Eldoret City. The study recommended that Tax authorities should continue to invest in and improve automated tax systems further to increase the accuracy and efficiency of turnover tax filing and reduce errors.

Effect of Peer Influence on Value Added Tax Compliance Among Manufacturing Firms in Embakasi North, Nairobi, Kenya

2026-04-06T12:59:15+00:00

Value-Added Tax (VAT) compliance and digitalization is significant, as digital tools and technologies play a crucial role in improving tax compliance, reducing errors, and enhancing efficiency in tax collection. Value Added Tax (VAT) compliance is a critical aspect of revenue collection for governments worldwide. However, it has encountered various challenges, the most prevalent being verifying input tax claimed by taxpayers when filing VAT returns. The study's general objective was to determine the effect of peer influence on value-added tax compliance among manufacturing firms in Embakasi North, Nairobi, Kenya. The study was guided by the Theory of Planned Behaviour. The research design was explanatory, with a target population of 426 manufacturing firms in Embakasi North, Nairobi, Kenya, and a sample of 206 respondents. Out of the 206 questionnaires issued, 196 were completed and submitted on time, resulting in a 95.1% response rate. The data was collected through a structured questionnaire. The research data were analyzed using descriptive statistics, measures of central tendency, and inferential statistics, including linear regression analysis. The study found that peer influence affects value-added tax compliance (β = 0.186, p = 0.000). Based on the findings, the study recommends that the government should foster peer influence by creating official digital forums or recognizing compliant firms, thereby harnessing social norms to encourage wider compliance. Future research should investigate the impact of tax audit on Value Added Tax Compliance.

Effect of the Electronic Customs Risk Analysis System on Trade Facilitation among Clearing and Forwarding Companies at Malaba Border Post, Kenya

2026-04-06T13:10:18+00:00

Trade facilitation is the streamlining and harmonization of international trade procedures that impede the flow of goods, people, and vehicles across international borders, resulting in increased business costs, delays in goods clearance, and reduced commodity flows. One of the main tools for ensuring that trade facilitation is completely achieved across national borders is the One-Stop Border Post. The study, therefore, was to determine the effect of the electronic customs risk analysis system on trade facilitation among clearing and forwarding companies at Malaba Border Post, Kenya. The theory that guided the study was New Trade Theory (NTT and Risk Management Theory. The study used an explanatory research design. The target population was 1086 clearing and forwarding agents in Kenya, and a sample size of 292 respondents. Since 292 of the targeted 254 respondents fully completed and submitted their responses. Structured questionnaires were used to collect primary data, which were analyzed using descriptive and inferential statistics. The study found that the electronic customs risk analysis system had a significant and positive effect on trade facilitation (β = 0.480, p =0.000). Given the positive effect of the electronic customs risk analysis system on trade facilitation, the study recommends that government agencies, such as the Kenya Revenue Authority (KRA), develop policies that mandate and incentivize data sharing among government departments and private-sector stakeholders. This will enrich the risk engine's data pool, enabling more precise targeting of high-risk consignments and faster clearance for legitimate trade. Future studies should investigate how variables such as digital literacy impact facilitation of trade activities at border clearing and forwarding companies at Malaba Border Post, Kenya.

Effect of Taxpayer Morale on Rental Income Tax Compliance Among Property Owners in Ruaraka Sub-County, Kenya

2026-04-06T13:18:45+00:00

Taxation is a major revenue source for governments worldwide; therefore, tax authorities must continuously implement measures to ensure maximum revenue collection. Despite KRA's measures, rental income tax compliance has remained low, and therefore, KRA continues to fall short of its annual targets. This study aimed to determine the effect of taxpayer morale on rental income tax compliance among property owners in Ruaraka Sub-County, Kenya. The study was guided by the following theories. Ability to Pay theory and Theory of Planned Behaviour. The study adopted an explanatory research design. The target population was 3281 property owners in Ruaraka Sub-County, and the sample size was 356 respondents. After the collection of responses, 306 respondents fully completed the questionnaires and submitted them. This implies a 86% response rate. The study was conducted using primary data collected through structured questionnaires. The data was analyzed using descriptive and inferential statistics. The study's regression analysis found that Taxpayer morale had a positive and significant effect on rental income tax compliance (β = 0.245, p = 0.000). The government should integrate civic education into school curricula and public campaigns to foster a culture of tax compliance as both a moral duty and a cornerstone of active citizenship. Messaging should emphasize the social contract and the collective benefits derived from tax contributions. Future research could explore the effect of cost obligation on rental income tax compliance.

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

2026-04-06T14:37:45+00:00

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.