EFFECT OF ONLINE TAXPAYER REGISTRATION ON TAX COMPLIANCE OF SMALL AND MEDIUM ENTERPRISES IN ELDORET TOWN, KENYA

Author's Name: George Lunani, Dr. Carolyne Ayuma & Dr. Emmanuel Tanui
Subject Area: Social Science and Humanities
Subject Business Management
Section Research Paper

Keyword:

Online Tax Registration, iTax system, Tax Compliance, SMEs


Abstract

Tax authorities are turning to e-government led solutions like integrated tax administration systems to interact with taxpaying public in tax collection, administration and compliance settings. It is on the basis of this purview that this research is born. Its main objective was to determine the effect of online tax registration on tax compliance. The specific objective is, to establish the effect of online tax registration on tax compliance of Small and Medium Enterprises in Eldoret, Kenya. The development of literature was guided by the technology acceptance model (TAM) theory. An explanatory research design was adopted and the target population was 2670 Small and Medium Enterprise taxpayers in Eldoret Town, North Rift Region. The sample size was 347 Small and Medium Enterprise tax payers. Stratified and simple random sampling technique was used to identify the respondents. Construct validity was tested using factor analysis and reliability using cronbachs’ alpha technique. The data was analyzed using SPSS version 20 software using descriptive statistics and inferential statistics. The results were, online tax registration (ß = .333, p = .041, < .05). The study concluded that online tax registration has a significant effect on tax compliance. The study recommends that small and medium enterprises should keep detailed records of all input tax and output tax to facilitate the completion of VAT returns.

Download Full Paper