Journal of Finance and Accounting

Effect of Dispute Resolution Mechanism Reforms on Rental Income Tax Compliance Among Property Owners in Ngong Town, Kenya

2025-01-08T09:14:21+00:00

Purpose: Despite these reforms tax compliance for the rental income tax has remained low since its introduction. This study aimed to determine the effect of dispute resolution mechanism reforms on rental income tax compliance among property owners in Ngong Town, Kenya. The study was guided by the following theories: Ability to pay Theory and Conflict Resolution Theory.

Methods: The study adopted an explanatory design and the target population was 2,468 rental income tax compliance among property owners in Ngong Town, Kenya and sample size of 344 respondents. Out of a total of 344 issued questionnaires, 251 individuals correctly filled their questionnaires and submitted them resulting in a response rate of 73%. Primary data collection was collected using structured questionnaires. The data was analyzed using descriptive, inferential statistics and multiple linear regression analysis.

Results: The study regression analysis found that dispute resolution mechanisms reforms had a positive and significant effect on rental income tax compliance β = 0.568, p = 0.000,

Conclusion: It is recommended that the government ought to prioritize enhancing dispute resolution mechanisms. The significant positive effect of these mechanisms on rental income tax compliance suggests that improving them can lead to better tax compliance rates. Future research could explore the effects of socioeconomic factors on rental income tax compliance.

Effect of Tax Literacy on Digital Income Tax Compliance among E-Commerce Traders in Nairobi, Kenya

2025-01-08T09:59:23+00:00

Purpose: The global digital economy has created a disruptive market where goods and services are exchanged online without requiring a physical presence at the point of sale. This poses a challenge for many governments worldwide in terms of collecting appropriate tax revenues from these digital platforms. The purpose of this study was to determine the effect of tax literacy on digital income tax compliance among e-commerce traders in Nairobi, Kenya. The theory that guided this study was the unified theory of acceptance and use of technology.

Methods: Explanatory research design was used in this study. The target population was 130 e-commerce traders in Nairobi, Kenya and a census survey was applied. The survey had 110 responses, which thereby 84.6% response rate. Questionnaires were used to collect primary data and analysis included both descriptive and inferential statistics. Null hypothesis was tested at 95% confidence level, and consequently, a significance level of 0.05 using the multiple regression analysis.

Results: The findings reveal that tax literacy has a positive and significant effect on digital income tax compliance among e-commerce traders in Nairobi, Kenya (β=0.206, p-value=0.004).

Conclusion: The Kenya Revenue Authority (KRA) should implement comprehensive education programs to increase tax literacy among e-commerce traders. These programs could focus on simplifying complex tax laws, providing practical guidance on compliance, and leveraging digital platforms for easy access to information. Future studies may examine the impact of psychological factors, such as taxpayer morale, on digital income tax compliance.

Government Taxation and Growth of Large Manufacturing Firms in Nairobi City County, Kenya Registered with Kenya Association of Manufacturers

2025-01-17T08:09:30+00:00

Purpose: This article explores the intricate relationship between government taxation and the growth of large manufacturing firms. Specific objectives of this study were to investigate effect of corporate income taxes, excise duty taxes and custom duty taxes on growth of large manufacturing firms. Finally, to examine moderating effect of firm size on the relationship between government taxations and growth of large manufacturing firms.

Methods: The research was guided descriptive research design with secondary data obtained from audited financial statements. The researcher employed stratified and systematic sampling to select 73 organizations from Nairobi City County's large manufacturing firms for the study. Panel data analysis was employed.

Results: The findings indicated that corporate income taxes had a negative and significant effect on growth of manufacturing firms (β=-0.002, p=0.045); excise duty taxes had a positive and significant effect on growth of manufacturing firms (β=0.004, p=0.000); and custom duty taxes had a positive and significant effect on growth of manufacturing firms (β=0.005, p=0.005). Further, the interaction between government taxations and firm size had a negative and significant effect on growth of large manufacturing firms in Kenya (β=-0.0028, p=0.000).

Conclusion: The study found that corporate taxes positively impact growth, as higher taxes correspond with increased income and tax contributions from rapidly growing firms. The relationship between excise duty and growth was positive but not statistically significant, suggesting little effect on large manufacturing firms. The study recommends maintaining current corporate tax rates for large manufacturers, as they do not impede growth. Policymakers should consider the minimal effects of these taxes when designing fiscal policies, and future research could investigate other tax-related factors. Additionally, firms are encouraged to expand their asset bases to enhance investment potential, improve funding security, and achieve economies of scale.

Branchless Banking Services and Financial Stability of Commercial Banks in Kenya

2025-02-18T12:48:05+00:00

Purpose: Financial stability is a key goal for commercial banks, as it allows them to operate effectively in fulfilling their role as intermediaries in the financial system. Technological advancements, creative financial products, shifting consumer needs, and the utilization of different distribution channels are all having an impact on the banking sector. The purpose of this study was to investigate how Kenyan commercial banks' financial stability is impacted by branchless banking services.

Methods: Using an explanatory research approach, the study concentrated on all 38 commercial banks as of December 31, 2023. From commercial banks, primary and secondary data spanning the years 2016 to 2022 was gathered. Data collecting sheets were used to gather secondary data. The gathered data were coded, cleaned, tabulated, and shown in tables before analysis. Statistics, both descriptive and inferential, were used to conclude. Descriptive statistics included the mean and standard deviation and inferential statistics included regression analysis. STATA 15 software was used for the analysis in this study.

Results: The study found a positive and significant relationship between agency, mobile, and online banking services and financial stability.

Conclusion: Agency, mobile, and online banking services have a positive and significant effect on financial stability of commercial banks. The study made recommendations that commercial banks should implement measures that will lead to increased use of branchless services such as ATM banking, agency banking, mobile banking, and online banking to improve their financial stability. The study also recommended that policymakers should make policies that aim at increasing the use of branchless banking services.