Kenya Revenue Authority Research Articles

Customer Responsiveness Strategy and the Performance of Kenya Revenue Authority in Mombasa County, Kenya

The customer is the primary growth determinant of an organization’s direction toward desirable performance. Proactive organizations that recognize the reality of customer focus contributions to business operations have significantly portrayed positive performance. This research aims to investigate how customer responsiveness influences the performance of an organization, with a specific focus on the Kenya Revenue Authority. To in aid establishing the foundational base of the study, theories such as the Resource Based View, Systems theory, Gap analysis Model and the Upper Echelon Theory were taken into account. The study employed the descriptive research design to comprehensively understand the current conditions and circumstances. The study's target population considered 445 KRA technical staff in Mombasa, including managers, supervisors, officers, and support staff. The study employed stratified sampling where 134 respondents were selected, who either had recently joined the company or altered their job roles according to duration of employment. To test the reliability of the study, the researcher employed Cronbach’s alpha coefficient which had a threshold of 0.7. The threshold of a coefficient should be between 0 to 1 to maintain an internal consistency indicating reliability. To accurately determine the validity of the data for factor analysis, the Kaiser-Meyer-Olkin (KMO) Test and Bartlett’s Test of Sphericity were conducted. The KMO test yielded a measure of sampling adequacy of 0.743, which indicates that the sample size was adequate for factor analysis. Data collection for the study was through the use of a close-ended questionnaire in the statement form. The data was analyzed through measures of central tendency such as mean, median, and mode. The analysis also included measures of dispersion such as variation, standard deviation, correlation analysis and regression analysis. It was observed that technology had the most substantial impact on KRA's performance. Indicating a strong positive relationship between technological implementation and performance outcomes. Service level agreements were found to be a significant predictor of performance suggesting that clear and well-structured SLAs contribute positively to the quality-of-service delivery, ensuring that customer expectations are met effectively. Top management support significance highlighted the importance of leadership and resource allocation in driving organizational success. Conversely, staff training indicated that while training is important, its direct influence on performance may be more nuanced or dependent on other mediating factors. Overall, the study found that customer responsiveness strategies significantly influence the performance of KRA in Mombasa County.

Factor influencing taxpayer compliance on voluntary tax disclosure program initiative: Case of Kenya revenue authority southern region

Tax is the primary source of government revenue, its vital component in running daily government activities. Not collecting enough tax causes the government to strain or stalling of its mandates, therefore its role of every government to mitigate and maximize its tax collection scope. The research sought to investigate the factors influencing taxpayer compliance on voluntary tax disclosure program in Kenya Revenue Authority, case of Southern region. The specific objectives of these research included, to assess the effects of Tax Sanctions on the taxpayer on participation in a voluntary tax disclosure program. To determine the impact of subjective norms of taxpayer participation on the Voluntary tax disclosure program. To evaluate the influence of taxpayer knowledge on participation in a voluntary tax disclosure program. The main challenge that was thematic for investigation, why despite the opportunity to declare asset without punitive punishment, still there is few uptakes for the program. The geographical location of the research was in Southern Region Domestic Taxes department on its six tax office namely; Voi, Mombasa South, Lamu, Malindi, Mombasa North and Diani for the financial year 2023/2024. The study sought to use descriptive approach, where a sample size of 150 was derived from a population of 230 staffs in Compliance Domestic taxes. Data collection was done using online well-structured questionnaire via Kobo-Collect in a random sampling and analyzed using SPSS version 28. To test validity and reliability of the data pilot test was conducted and Cronbach alpha and KMO-test proved data to be reliable and valid. The output of the analysis showed the regression model whose covariates, Tax sanction (t=2.448, P<0.016) subjective norm (t=3.347, P<0.001) and taxpayer Knowledge (t=7.827, P<0.00) were all significant at 95% level. Moreover, the R2 =0.951 which means the exploratory variables explained 95.1% variation of Compliance to the Voluntary tax disclosure. The ANOVA result showed the data was fit to the model was good at (F=942.61, p<0.00). The study concluded indeed, Subjective norms, Tax Sanction and Taxpayer Knowledge influences greatly compliance of Taxpayer towards Voluntary tax disclosure. The research implied that proper use of tax sanction such us fines, penalties, and interest on taxpayers would increase compliance. Also educating taxpayer is essential as the decisions made by some taxpayers depend on the knowledge they have acquired. Also on subjective norms, some behaviors are traceable as some are based on influence of association hence compliance officer need to continuous encourage taxpayer to comply. This research recommends that the authority through the compliance officer, use of subjective norms, Taxpayer knowledge and Tax sanction as a mitigating strategy to mitigate on Voluntary tax disclosure, through this it will increase tax base and revenue mobilization and compliance status of Taxpayers.

Effect of Tax Morale on Value Added Tax Compliance Among Medium Taxpayers in North of Nairobi Tax District, Kenya

Purpose: Tax compliance is important as it has a direct impact on revenue for most governments around the world. Despite the reforms that the Kenya Revenue Authority has been undertaking to increase revenue collection, it has of late failed to meet its revenue targets, particularly VAT targets. There has also been existence of fluctuations in VAT collection over the past couple of financial years. The objective of the study is to showcase the effect of tax morale on Value Added Tax compliance among medium taxpayers in north Nairobi tax district, Kenya. The study has been guided by the ability to pay theory. Methodology: The study adopted the explanatory research design and primary data was collected using structured questionnaires with closed-ended questions. The total target population was 2,376 VAT-registered medium taxpayers in north of Nairobi tax district, Kenya and the sample size was 342 respondents. Out of the 342 respondents targeted, 274 questionnaires were correctly filled and returned, indicating 80% response rate. Results: The study also found that tax morale had a positive and significant effect on Value Added Tax compliance β=0.173 p-value =0. 016. Conclusion: The study recommends that the government of Kenya should allocate resources towards improving taxpayer services, including helplines, online portals, and advisory services.

Effect of Transfer Pricing on Corporation Tax Compliance Among Multinational Corporations in Nairobi Kenya

Purpose: Tax is a compulsory contribution that is made by the citizens of a country to the government for the provision of public utilities. It is evident from the National Tax Policy, 2024 that the Kenya Revenue Authority (KRA) and the government at large have recently shown a lot of interest in multinationals due to the complexity of their operations and the tendency for them to come up with complex tax avoidance mechanisms. This has also been complicated by the widespread abuse of transfer pricing models adopted when dealing with multinational corporations operating in Kenya. This study looked into effect of transfer pricing on corporate tax compliance among multinational corporation companies in Kenya. The study was guided by the following theories, AS theory, the Slippery Slope Framework, and the theory of the planned behavior. Methodology: The study employed an explanatory research design. The target population was 221 multinational corporations’ companies and a sample size of 142 respondents. Questionnaires were used to collect primary data and analysis was descriptive statistics include frequency, percentage, and mean while inferential statistics included correlation and multiple regression. Results: The study findings found out most companies in Nairobi, Kenya have transfer pricing policies that are moderately but not adequately in line with domestic tax statutes. Most companies will use transfer pricing as a tool to reduce their tax liabilities. Further, KRA is moderately but not adequately efficient in monitoring and regulating transfer pricing practices in our company. Conclusion: The study results concluded that transfer pricing affects corporation tax compliance Based on the findings, the study recommends there is a need for exchange of information and more international collaborative efforts from a policy, legal, and academic front to address aggressive tax avoidance practices from MNCs. Therefore, future studies can be conducted on the impact of Dispute resolution mechanism on corporation tax performance.

Trade Facilitation: Do The Custom Administration Procedures Matter?

This paper seeks to address the effect of customs administration procedures on trade facilitation in Kenya. The study employs an explanatory research design and administered questionnaires as the data instrument to gather data from 200 customs officials in Keny a. The study findings indicated that declaration of goods, documentation and verification of goods had a positive and significant effect on trade facilitation. From the results, the study concluded that customs administration procedures ha ve a significant influence on trade facilitation in Kenya. This study was anchored on Resource Based View (RBV) Theory. This research study adds to the existing knowledge and improves understanding to the building of a solid framework. The ultimate objective of enhancing t rade facilitation is evaluated against significant custom procedures such as declaration of goods, documentation completeness and verification of goods. Kenya Revenue Authority should enhance declaration of goods by ensuring that declaration of goods follo ws the international standards; should ensure accurate completion of required export documentation, comply with import/export documentation requirements and produce documents such as invoice for the goods; and should ensure thorough inspection of the goods , conduct complete inventory inspection and application of scanners in verification of goods.

The Effect of Social Norms on Value Added Tax Compliance among Small and Medium Enterprises in Embu Town

Despite the increasing need to raise the level of revenue collection, Kenya still faces the challenges of low tax compliance. The broad objective of the study was to determine the effect of social norms on value tax compliance among small and medium enterprises in Embu town, Kenya. The study was guided by social influence theory. The study adopted an explanatory research design and targeted a population was 1050 small and medium enterprises in Embu town. A sample size of 290 was drawn from this population and the response rate was 74%. Primary data collection was employed using closed structured questionnaires from study's objective. The data was analyzed using descriptive, inferential statistics and multiple linear regression analysis. A correlation analysis conducted before testing for coefficients shows that there was a positive and significant linear relationship between social norms and value tax compliance r=0.696. The coefficient table indicates that social norms have a positive effect on VAT compliance β= 0.138 (p=0.006<0.05). Based on the findings the study recommends that Kenya Revenue Authority integrate insights from behavioral economics into tax compliance theories. Explore how psychological factors such as social norms can be incorporated into models predicting taxpayer behavior. Further research may be conducted to investigate the effect of technology on VAT compliance.

Effect of Risk Assessment and Management on Operational Performance of Kenya Revenue Authority

Purpose: Operational performance require effective and efficient internal control mechanisms to check on any leakages, cost of revenue mobilization, negative variance concern on revenue targets among other aspects. The study explained the effect of risk assessment and management on operational performance of KRA Methodology/Approach: Causal design that outline the cause and effect association of risk assessment and management on operational performance. Targeted of finance employees, audit employees and investigation employees adding up to 253 of which 155 were sampled. Findings: Risk assessment and management reported a significant relationship with operational performance of Kenya Revenue Authority. The association was further reported as negative on basic element of risk factor. Implications: KRA management should assess risk and provide mitigation measures that could lead to operational performance. Risk decisions should be well made. That KRA should up audit exercises and conduct interim as well as final audits and make use of audit recommendations given to enable operational performance. Finally, the study recommends that KRA should always make financial reports in accordance to law and hence review them to establish areas to be improved for operation performance.

Resource Allocation Change Management Practice and Performance of Kenya Revenue Authority in Nairobi City County, Kenya

Purpose: Kenya Revenue Authority is mandated to gather revenue in place of Kenyan government. The revenue to be collected is normally set as a target by the National Treasury. Over the time, the authority has continuously missed hitting the revenue collection target. As a result, the authority has endeavored to implement changes with the aim of improving and enhancing revenue collection. The current study aimed at establishing how resource allocation change management practice influenced performance of Kenya Revenue Authority in Nairobi City County, Kenya. The study was guided by Resource-Based View Theory. Methodology: The study employed a descriptive research design and targeted 470 Kenya Revenue Authority employees working at Customs and Border Control Department in Nairobi City County. A stratified random sampling approach was applied in selecting a sample of 141 respondents derived from top level, middle level, and lower level of management. The study utilized a 5-Point Likert scale questionnaire containing close ended question to gather primary data. Inferential as well as descriptive statistics were utilized to analyze the gathered data. Prior data collection, the study conducted a pilot study on 13 randomly selected respondents to assess the level of validity and reliability of the questionnaire. Findings: The descriptive statistics results revealed that all respondents on average were in agreement with statements on resource allocation change management practice. The correlation analysis results established that resource allocation change management practice positively and significantly correlates with performance of Kenya Revenue Authority. The study further established that resource allocation change management practice positively and significantly influence performance of KRA in Nairobi City County. This is shown by beta value of 0.538 and significant values of 0.000. The results bears the implications that increasing the resource allocation change management practice with one unit results to increase in the performance levels of KRA with 0.538 units. The study findings led to conclusions that resource allocation change management practice positively and significantly influences the performance of Kenya Revenue Authority in Nairobi City County. Unique contribution to theory, policy and practice: The study recommended the management Kenya Revenue Authority to enhance the resource allocation practices since the practices bears a positive and significant influence on performance.

Aggressive Tax Planning and Performance by Kenya Revenue Authority

Taxation is a vital fiscal tool that can be utilized to augment the economic wellbeing of a nation. Taxation is not only vital for revenue generation purposes; it can also be used to control the behavior of taxpayers such as raising taxes on commodities that are deemed to be toxic to the society, if over consumed. In Kenya, from Financial Year 2010/11 to Financial Year 2020/21 has recorded a deficit budget. A deficit budget implies that the economy’s leverage is weak. The country`s debt ceiling has now become a major issue, since the increase in national debt has surpassed the stipulated threshold necessitating adjustment of debt ceiling. Aggressive tax planning is vital with regards to revenue performance by Kenya Revenue Authority. This paper reviews the conceptual, theoretical and empirical literature and raises a variety of issues that necessitates a proposed theoretical model for the purpose of understanding aggressive tax planning and performance by Kenya Revenue Authority. This study aims at assessing the effects of debt shifting, location of intellectual property rights, bilateral tax treaty and performance by Kenya Revenue Authority. This research will be anchored on Social Learning Theory and Tax Competition Theory. This research study reviewed on the previous studies undertaken on the area of interest. This study focused on the study findings and the methodology. The conclusions regarding the relationship that exist between the independent variables and dependent for this study were derived from the findings of the past studies. Recommendations in this study were made based on the previous study findings and conclusions. This study found that Multinational corporations tend to exploit all the available loopholes within the tax laws in order for them to decrease their tax liability to tax administration. Due to multinational corporations adopting aggressive tax planning, the dire repercussions include tax revenues being collected by the tax administration tend to reduce significantly. This leads to tax administration not meeting their tax revenues collection targets. This study recommends KRA to continuously review any existing loopholes in the tax laws. Sealing the respective loopholes in the tax laws tend to enhance tax revenues collection targets. Further, multinational corporations need to observe ethics in their business practices.

Examining the Effectiveness of Performance Contracts in Enhancing Service Delivery: A Case Study of Kenya Revenue Authority's Southern Region

Examining the Effectiveness of Performance Contracts in Enhancing Service Delivery: A Case Study of Kenya Revenue Authority's Southern Region

E-Government and Service Delivery at Kenya Revenue Authority Headquarters in Nairobi City County, Kenya

E-Government and Service Delivery at Kenya Revenue Authority Headquarters in Nairobi City County, Kenya

The Effect of Regional Electronic Cargo Tracking Systems on Cargo Safety at the Kenya Revenue Authority

The Regional Electronic Cargo Tracking System (RECTS) was adopted by the Kenya Revenue Authority (KRA) to enhance cargo security and boost revenue collection. RECTS is aimed at addressing inefficiencies in vendor-operated Electronic Cargo Tracking Systems (ECTs) whose geo-fence routes can be manipulated, making it challenging to determine the exact location of the cargo. Their failure to send alerts on seal tampering and diversions has resulted in a substantial loss of revenue. This study sought to assess the impact of RECTS on cargo security with a focus on KRA customs operations. The study addressed the impact of RECTS cargo tracking on cargo security, the impact of RECTS cargo monitoring on cargo security, and the measurement of the impact of RECTS real-time response on cargo security at KRA. The research adopted a descriptive research design. The target population for this study was the 140 Rapid Response Units (RRU) and the Cargo Monitoring Unit (CMU) staff working at the five designated RRU stations along the Northern Corridor. Stratified simple random sampling was used to select 104 KRA staff to participate in the study. The primary data was collected by means of a self-administered questionnaire provided to the staff working at the five designated stations. Secondary data was collected from the records of the Cargo Monitoring Unit on incidents of theft, tampering and damage of cargo. The data was analysed using SPSS to compute descriptive and inferential statistics. The study established that the independent variables of cargo tracking, cargo monitoring and real-time response, significantly influence the dependent variable as they account for an 82.90 per cent variation in cargo security. The results of a multiple regression analysis established that cargo tracking has a positive and significant effect on cargo security (β1=0.873, p=0.000); that cargo monitoring has a positive and significant effect cargo security (β2=0.175, p=0.015); and that real-time response has a positive and significant effect cargo security (β3=0.222, P=0.000). The findings of the study revealed that cargo tracking enhances the security of the cargo by deterring cases of cargo diversion and by providing the exact location of the stolen, damaged or tampered cargo enabling the Rapid Response Unit to locate the cargo and resolve the situation immediately. Cargo monitoring enhances cargo security by providing real-time alerts in respect of cargo seal tampering which minimises the tampering that previously occurred during changeover of seals at border points. Additionally, real-time response enhances the security of cargo by reducing the time taken by the Rapid Response Unit to respond to and resolve cases of theft, tampering and cargo accidents during transit.

An empirical analysis of the dynamics of tax revenue determinants in kenya: A longitudinal approach

The volatility of tax income poses a significant challenge for Sub-Saharan African countries, contributing to erratic public spending and hindering sustainable economic progress. Recent global economic crises have underscored the urgency for these nations to bolster local revenue sources and overcome structural barriers to economic development. This paper examines the factors influencing tax revenue in Kenya over 39 years, from 1984 to 2022. Utilizing data from various sources, including the World Bank's World Development Indicators (WDI), the Kenya Revenue Authority (KRA), the Central Bank of Kenya (CBK), and the Organization for Economic Co-operation and Development (OECD), the study employs an autoregressive distributed lag (ARDL) model to distinguish long-run relationships from short-run dynamics due to the mixed order of integration among variables. The empirical model includes real GDP, agricultural gross value added, general government expenditure, inflation, consumer price, official development assistance, and industrial gross value added as key determinants. The ARDL bounds test confirms a long-term equilibrium. The connection between the variables and the error correction model indicates a relatively quick adjustment process, with around 25% of disequilibrium corrected within a single period. Results from the long-run ARDL estimation suggest that agricultural value added significantly increases tax revenue. In contrast, variables such as GDP and government expenditure do not show a significant long-term effect. In the short run, the lagged tax-to-GDP ratio and GDP significantly impact tax revenue. These findings underscore the importance of agricultural productivity and provide valuable insights for policymakers seeking to enhance tax revenue in Kenya.

Residential Rental Tax Enforcement and Revenue Collection by Kenya Revenue Authority

Residential Rental Tax Enforcement and Revenue Collection by Kenya Revenue Authority

Influence of Resource Allocation on the Performance of the Kenya Revenue Authority

Influence of Resource Allocation on the Performance of the Kenya Revenue Authority

Influence of Strategic Leadership on the Performance of the Kenya Revenue Authority

Influence of Strategic Leadership on the Performance of the Kenya Revenue Authority

The Role of Technology Adoption, Tax Base Expansion, Taxpayers' Education, Customer Service, and Strategy Communication on the Organizational Performance of Kenya Revenue Authority

The Role of Technology Adoption, Tax Base Expansion, Taxpayers' Education, Customer Service, and Strategy Communication on the Organizational Performance of Kenya Revenue Authority

Mitigating Taxation Effects on Small Business Enterprises Performance in Kenya

For small business enterprise performance to improve, the government needs to reduce taxation or even give tax relief or zero-rate the tax due. In Kenya, national government has taxes levied on all goods manufactured or produced locally and those imported. Kenya Revenue Authority assisted by other government agencies ensure nothing is left untaxed. The local governments are also trying to get their share of tax revenue by ensuring no small business enterprise operates without paying their respective licenses and rates. Cartels are not left behind in their fight for survival by raising their survival funds from the small business enterprises. Small business enterprises are the majority enterprises and the best victim for cartel agencies. Every industry channel their goods and services to customers through the small enterprises. For each industry to survive, it has its charges to those interested in doing business with their products and services. Every small business enterprise will rate its performance through the market share it commands, it’s profit margin over a given period of time against its costs and the many variety goods or services the small business offers. This paper looks at how small business enterprises are mitigating the effect of taxation they find themselves in from the government, cartels and industry to survive.

Relational practices and performance contracts in public organizations in Kenya: A case of Kenya revenue authority

Kenya adopted Performance Contracts as a tool not only to improve performance but also torefocus the mindset of the civil service from looking within to focusing on customers andresults. The push factor for introduction of performance contracts in Kenya is the assumptionthat institution of performance measurements, customer orientation and an increased focustowards incremental productivity and cost reduction can lead to improvements in servicedelivery. The purpose of this research was to examine the performance contracts applicationat the Kenya Revenue Authority as well as the efficacy of the instrument in improvingperformance. The main objective was to determine the influence of Performance Contractingprocesses on performance management. The study adopted descriptive design and targeted120 employees of the organization who were based in the Head office; stratified samplingmethod was used.Data was collected using a questionnaire which contained both structuredand unstructured questions. The data was analyzed by descriptive statistics such as mean andstandard deviation. Inferential statistics such as regression was also carried out. The dataanalysis process was aided through a Statistical Package of Social Sciences. The data waspresented using tables and graphs. The study found out that performance contract had helpedimprove service delivery in KRA and that majority of the employees had participated intraining/ sensitization workshop on performance contracting. However there was no clarity inunderstanding how training needs for individual employees were arrived at.
 The study also established that majority of the employees were not involved in the process ofperformance targets setting. The study concludes that KRA did not involve the employees inall stages of drawing work plans and this led to drawing targets that were not in line withindividual roles. It was also concluded that the follow up by the top management on theimplementation of the set targets was not extensive. The study recommends that theorganizations should establish and adopt performance contract system that provideopportunities to the management in identifying staff training needs, identify performancetargets, and improve employees‘ performance. There is also need for increased training andsensitization programmes and increased involvement of all the employees in the processperformance contracting.

Measures by Organisations to Counter Challenges in the Use of Information Technology in Protecting Personal and Business Data in Nairobi County, Kenya

Globally, most states have adopted new technologies that have seen many process improvements and cost optimisations and enabled them to provide value-added services to their citizens, thereby improving quality of life and achieving rapid growth and development in various sectors of the nation. Kenya is one of the developing countries that has benefited from adopting modern ICT in recent years. Despite government efforts to ensure the successful integration of ICT into various state departments and the private sector to protect and manage data, cases of document loss from individuals and institutions have been on the rise. This paper examined measures by organisations that could be adopted to counter challenges in using information technology to protect personal and business data in Nairobi County. The study’s target population comprised employees from Kenya Revenue Authority and Kenya Data Networks in Nairobi headquarter offices, police officers deployed at NPS offices headquarters and members of the public. The findings established that implementing electronic data management systems in organisations was more appropriate for controlling data loss. In addition, training employees on using the data management system is critical in preventing data loss in an organisation. Creating awareness of electronic data management systems was an effective measure to protect against data loss among organisations. Based on the findings, the paper concludes that strategies that help solve information challenges must be implemented to prevent data loss at personal and organisational levels.