Journal of Finance and Accounting

Effect of Tax Audit on Turnover Tax Compliance among Small and Medium Enterprises in Langata Sub-County, Nairobi, Kenya

Leonard Juma Oringo, Dr. Benard Baimwera PhD, Dr. Daniel Kirui PhD — Wed, 04 Dec 2024 00:00:00 +0000

Purpose: The implementation of turnover tax compliance (TOT) in Kenya was aimed at enhancing revenue collection and improvements in the tax system, the effectiveness of tax administration, and lowering the collection costs in the SME sector. However, over the past decade, the KRA has visibly struggled to implement the tax regime as well as collecting the returns. One of the major shortfalls of the TOT has been its collection due to its dependence on the goodwill among the affected taxpayers. Therefore, the main aim of the study was to establish the effect of tax audit on turnover tax compliance among small and medium enterprises in Langata sub-county, Nairobi, Kenya. The study was anchored on the Economic Deterrence theory.

Methods: The study adopted an explanatory research design. The sample size for this study was 353 derived from 3,061 registered SMEs of the population using Yamane (2012) formulae and the responses by owners/managers of the firms. The study targeted 353 questionnaires with each target firm, 268 respondents managed to fill and return the questionnaires showing a 76% response rate.

Results: The analysis of the hierarchical model found that tax audit has a significant positive effect on TOT compliance (B = 0.373, p = 0.006). In a nutshell, the study found that there is a significant relationship between tax audit and TOT compliance among small and medium enterprises in Langata Sub County, Nairobi, Kenya.

Conclusion: The study recommends conducting frequent tax audits to enhance Turnover tax compliance.

Effect of Simplicity of the Tax System on Income Tax Collection among Small and Medium Enterprises in Kamukuji Sub-County Nairobi, Kenya

Cyrus Gathungu Ndiangui, Dr. Robert Odunga, Dr. Paul Kabete — Wed, 04 Dec 2024 00:00:00 +0000

Purpose: Taxation is how government finances its expenditure by imposing charges on citizens and corporate entities. A country’s tax regime is always a key factor for any business considering moving into new markets. The purpose of this study was to establish the effect of Simplicity of the tax system on income tax collection among small and medium enterprises in Kamukunji Nairobi County, Kenya. The theories that guided this study were Ability-to-Pay Theory of Taxation, and, Unified Theory of Acceptance and Use of Technology.

Methods: The study adopted an explanatory research design. The target population was 3106 small and medium enterprises in Kamukunji Nairobi County. A sample size of 354 respondents was drawn from this population using Yamane’s formula. In this study, out of 354 targeted respondents, 283 questionnaires were correctly filled and returned, resulting in a response rate of 79.94%.

Results: The study found that Simplicity had a positive and significant effect on income tax collection (β = 0.236, p = 0.000).

Conclusion: The study recommends that the government should focus on simplifying tax procedures and forms to reduce administrative complexity. This can increase voluntary compliance by making the tax process more accessible, particularly for SMEs that may lack sophisticated accounting knowledge. Future research should Investigate the effect of tax incentives, on companies’ financial performance.

The Effect of Peer Influence on Turnover Tax Compliance among Small and Medium Enterprises in Meru County, Kenya

Kennedy Mutua Mugambi, Dr. Bernard Baimwera, Dr. Naomi Koske — Wed, 04 Dec 2024 00:00:00 +0000

Purpose: Turnover tax was introduced in Kenya in 2007 to enhance revenue collection, improve tax administration and reduce non-compliance and collection costs among the micro, small and medium enterprises. The main objective of the study was to determine the effect of peer influence on turnover tax compliance among small and medium enterprises in Meru County, Kenya. The study was guided by theory of planned behaviour.

Methodology: The study adopted an explanatory research design to enable the generalization of the study hypotheses. The target population was 1756 small and medium enterprises in Meru town and a sample size of 325 respondents. The study showed that the response rate for the questionnaire was 72.0%, showing that 234 out of 325 participants correctly filled the and submitted their questionnaires. The study used primary data, collected through questionnaires which was administered through drop and pick later method.

Results: The study found that peer influence had a positive and significant effect on turnover tax compliance (β = 0.237, p = 0.000).

Conclusion: Based on the findings, the study recommends that the government enhance programs that foster peer influence, as it has been shown to positively affect tax compliance. Future studies could also investigate the effects of KRA m-service on turnover tax compliance

Effect of Crypto Currency on Financial Market in Kenya

Dr John Kiarie — Thu, 12 Dec 2024 00:00:00 +0000

Purpose: This study sought to determine the effect of cryptocurrency on financial market in Kenya. The study sought to specifically determine the effect of Bitcoin Ethereum, and Litecoin on financial market in Kenya.

Methods: The current study adopted a qualitative research design. The specific research design qualitative research design that was adopted was a desktop research design.

Results: Studies have agreed that crypto-currencies have an impact on the financial market. However, studies observes that though cryptocurrency market have a significant effect on financial market, the impact is negative. The study therefore recommends that the government must consider developing explicit regulations for cryptocurrencies.

Conclusion: The government may potentially make money by levying fees on digital and online transactions, but this benefit can only be realized if the crypto business is governed by a proper legal framework.

Nexus Between Financial Technology and Investment Decisions among Youths Involved in Sports Betting in Nairobi City County, Kenya

Nahashion Kipkirui , Dr. Salome Musau — Fri, 13 Dec 2024 00:00:00 +0000

Purpose: Increased access to technology and the widespread use of technology devices in Africa have created new opportunities for sports betting that were not previously available. Sport betting has taken off among Kenya’s youth population, who are mostly sports lovers. Poor investment decisions among the youths have led to these youths suffering huge losses. This study aimed to ascertain how financial technology influences the investment choices made by young people in Nairobi City County, Kenya who bet on sports. This study aimed to specifically investigate how data-based services, mobile services, and digital platforms affect the decisions of young people who bet on sports.

Methods: Prospect theory, technological acceptance theory, and heuristic theory applications were used to support this study. The study employed a descriptive research design and target population was 302,540 young people who wager on sports. In this study, 384 young people were sampled using a basic random sampling technique. Primary data was collected using a questionnaire and analyzed using correlation and regression analysis.

Results: The study found that among young people who bet on sports, data-based services, mobile services, and digital platforms had a positive and significant impact on investment decisions.

Conclusion: The study concluded that financial technology has a significantly positive effect on investment decisions among youths involved in sports betting in Nairobi City County, Kenya. It is imperative for policymakers overseeing sports betting organizations to establish laws that facilitate the establishment of social media accounts by betting companies that effectively and efficiently disseminate information about sports bets. The government needs to lower the data subscription charges to allow the youths to place their bets. The management of sports betting organizations should keep funding mobile money technologies.