Effect of Innovative Technology on Revenue Collection in South Nyanza County Governments, Kenya

Abstract

After the enactment of Kenya's new constitution in the year 2010, a lot of public services were delegated to the County governments. Ideally, the county governments should finance their operations. However, almost all Counties suffer from inadequate financial resources to carry out their functions. This has been attributed to poor revenue collections. The main objective of this study, therefore, was to establish the effects of innovative technology on revenue collection in the South Nyanza region counties of Kisii, Migori, Homabay, and Nyamira County Governments. Specifically, the study aimed at answering; what is the effect of mobile money, electronic billing, online banking, and electronic receipting on revenue collections in County Governments of the South Nyanza region? Anchoring on the technology acceptance model, the study used a descriptive research design with a sample of 352 from a target population of 720 respondents. Data was collected using questionnaires. The study used random sampling to select revenue collection officers, and tax and revenue managers at the selected county governments as respondents. Before data collection, the study did a pilot study in Narok County to test the reliability of the questionnaires using the Cronbach Alpha test. The data collected was analyzed descriptively followed by multiple regression analysis. The study found that there was a positive and significant (β = .415, p-value = .0001<.05) relationship between mobile money and revenue collection. Secondly, the study found a positive and significant (β = .172, p-value = .0001<.05) relationship between e-billing and revenue collection. Further the study established a positive and significant (β = .092, p-value = .0044<.05) relationship between online banking and revenue collection. Lastly, the study reported a positive and significant (β = .360, p-value = .0001<.05) relationship between e-receipting and revenue collection. The study concluded that innovative technology (mobile banking, e-billing, online banking and e-receipting) positively influence collection of revenue collection in South Nyanza Counties. The study recommended that from the findings and conclusions, the study recommends that the revenue management or administration of South Nyanza Counties of Kisii, Nyamira, Homabay and Migori should formulate policies to help ensure costs of revenue collections remains low. They should do cost benefit analysis of innovative technologies in revenue collection like mobile money in revenue collections to ensure that they don’t cost too much and eat into their revenue collections. The counties should also make policies aimed at using innovative technologies like e-billing to aid in revenue planning. Thirdly, the revenue administration team should ensure that there are adequate policies that guides use of innovative technologies like online banking, mobile money, e-billing and e-receipting can aid them in better audit of their revenues.