Factors influencing the adoption and use of online tax filing system at Kenya Revenue Authority
ABSTRACT A vast majority of citizens and firms in most developed countries are within the tax base for both direct and indirect taxes, as compared to developing countries. Establishment of a sound public finance system is faced with social, political and administrative difficulties in developing countries, leading to tax evasion and avoidance activities by individual taxpayers and corporations. This explains why there is a huge difference between developed and developing countries in mobilization of resources. To curb these difficulties, some developing countries have committed to automate their tax administration to promote ease of doing business. In Kenya, one such reform has been to establish an automated filing system. This study aimed at investing factors influencing the adoption and use of online tax filing system at Kenya Revenue Authority (KRA). It also aimed at determining the role of demographic user characteristics, security, technology and organizational set up in the adoption and use of the KRA online tax-filing system. Stratified random sampling was used in recruitment of 2014 registered tax payers who had already embraced the online tax filing system as well as those who have not shifted from the manual mode of filing in North Nairobi. Semi-structured questionnaires were administered to collect data. Almost half (46.7%) of the respondents used the internet almost every day. They perceived themselves as computer literate, were aware of the on-line tax filing system and that training was necessary. Past experience was also identified as an important aspect to determine the respondents’ perception of on-line tax filing system. The study found security to be crucial in the adoption and use of on-line tax filing system as most respondents perceived the system as credible, though they also agreed that encryption threats, hacking and exposure to tax audits were major determinants in adopting and using on-line tax filing system. Education through mass media, internet connectivity,software use, lack of technical support and maintenance of ICT were identified as major drivers for adoption and use of on-line tax filing system. Organizational set up also played a crucial role in the adoption and use of on-line tax filing system. Pearson Correlation Coefficient Matrix revealed that user characteristics, security, technology and organizational set up significant positive correlation with the adoption and use of on-line tax filing system. The study concludes that user characteristics, security, organizational set-up and technology play a crucial role in adoption and use of online tax filing system at KRA.