Journal of Finance and Accounting

Effect of Tax Audit on Excise Duty Compliance among Non-Alcoholic Beverages Companies in Nairobi City County, Kenya

2025-03-01T07:54:45+00:00

Despite these reforms, Excise Duty compliance has remained low, the overriding objective of excise taxes in Kenya is to raise tax revenues, but the performance has been weak. This study aimed to determine the effect of tax audits on excise duty compliance among non-alcoholic beverage manufacturing companies in Nairobi, Kenya. The study will benefit policymakers, KRA, and future researchers. The study was anchored on the Economic deterrence theory. Explanatory research design was employed and the target population was 272 non-alcoholic beverages manufacturing companies in Nairobi with a sample of 162 respondents in this study, 136 out of 162 distributed questionnaires were correctly completed and returned, yielding 84 % response rate. The study showed that tax audit was also found to positively influence excise duty compliance. (β = 0.274, p = 0.002). The government should enhance the frequency and depth of tax audits among non-alcoholic beverage companies. Given the positive impact on compliance, regulatory agencies should allocate more resources and develop specialized audit teams to ensure companies adhere to excise duty obligations. Further research may be conducted to determine the effect of technology and other factors on tax compliance.

Effect of Legislative Reforms on Turnover Tax Compliance among Small-Scale Traders in Ruaraka Nairobi, Kenya

2025-03-12T15:40:51+00:00

Turnover tax was introduced in 2008 as a simple tax to bring small and medium enterprises into the tax net. Small and medium enterprises play a critical function in the advancement of the Kenyan Economy. However, much remains to be done to achieve the desired results that were anticipated when TOT was introduced. The study aimed to determine the effects of legislative reforms on turnover tax compliance among small-scale traders in Ruaraka, sub-county, Nairobi, Kenya. The study was anchored on the Ability to pay theory and the Institutional Theory. An explanatory research design was employed in this study and the target population was 3,240small-scale traders in Ruaraka, sub-county Nairobi with a sample size of 356 respondents. Out of the 356 issued questionnaires, 299 were filled accurately and returned, signifying 84% response rate. The study collected primary data through a questionnaire, and the data was analyzed using descriptive and inferential statistics to determine the association between variables. The correlation matrix found that legislative reforms had a positive correlation of (r = 0.423) with turnover tax compliance, implying that improvements in legislative reforms can lead to higher turnover tax compliance. The regression analysis found that legislative reforms had a significant positive effect on Turnover tax compliance. (β = 0.286, p = 0.000). The study recommends that the government should focus on continuous updates and improvements to tax legislation are essential. Ensuring that tax laws are clear, fair, and easily understandable will help in maintaining high levels of compliance. Future research should investigate how inflation and economic growth influence turnover tax compliance.

Moderating Effect of Tax Literacy on the Relationship Between Digitalization of Services and Turnover Tax Compliance among Textile Companies Nairobi County, Kenya

2025-03-27T17:22:56+00:00

Purpose: Tax compliance has been a matter of key concern for both researchers as well as tax administrators. Therefore, the study aimed to determine the moderating effect of tax literacy on the relationship between digitization of services and turnover tax compliance among textile companies in Nairobi County, Kenya,

Methods: The study adopted explanatory research design. The target population of the study was 43 textile companies in Nairobi (KRA, 2023). The respondents consisted of senior managers and finance section heads of the respective companies, hence a total of 172 respondents were the target population. The data collected was analyzed using both descriptive and inferential statistics. Linear regression model was used to establish the strength of the relationship between independent variable, dependent variable, and moderating variable.

Results: Digitalization of services had a significant positive effect on turnover tax compliance, with a standardized beta coefficient of 0.248 (β = 0.248, p = 0.006). The interaction between Digitalization of Services and Tax Literacy had a significant positive effect on turnover tax compliance, with a standardized beta coefficient of 0.600 (β = 0.600, p = 0.000).

Conclusion: The study concluded that improved digitalization of services had a significant and positive impact on compliance. The study concluded that higher levels of tax literacy significantly improved turnover tax compliance. It is suggested that the government may continue investing in the digitalization of tax services to make tax compliance more accessible and user-friendly. Management is recommended to advocate for and support digital transformation initiatives that streamline tax compliance. Additionally, tax literacy programs should be prioritized to ensure that taxpayers are well-informed about their obligations and the benefits of compliance.