Effect of government accountability on voluntary tax compliance of motor garages in Kenya

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dc.contributor.authorNganga, A. W.
dc.date.accessioned2024-07-09T06:22:46Z
dc.date.available2024-07-09T06:22:46Z
dc.date.issued2024
dc.descriptionFull - text thesis
dc.description.abstractThe effective functioning of a nation's government relies on resources to fulfill its duty of providing public goods and services to citizens. Taxation constitutes a significant portion of the country's internal revenue. However, implementing tax policies poses a considerable challenge, particularly in developing economies where a substantial part of the economy operates informally. Despite the informal sector being the primary employer in Kenya, most of the tax revenue is derived from personal taxes and value-added tax (VAT), not the informal sector. Apart from this, taxpayer apathy plays a significant role in influencing tax compliance. Yet many studies in this sector have been done in developed countries which are more transparent than countries in developing economies. To fill this gap this study therefore sought to establish the effect of government accountability on voluntary tax compliance of motor garages in Kenya. This research endeavors to explore the viability of the government creating a psychological understanding with merchants, particularly concentrating on those involved in wholesale and retail activities within the motor vehicle and motorcycle repair domain, commonly known as garages. The aim was to evaluate how the government's commitment to social, institutional, and economic accountability influences the voluntary adherence to taxation by these traders. This study was anchored on the legitimacy theory, the theory of predatory rule, and the fiscal exchange theory. The study used a census model to investigate all the 109 registered garages at the Kenya Motor Repairers Association. The study used the ordinary least square regression methodology and found that social and institutional accountability enhances voluntary tax compliance. Economic accountability was found not to have any statistical impact on voluntary tax compliance. KRA should therefore continue with their taxpayer education as this will lead to improvement in compliance. Additionally, the study found that tax audits enhance voluntary tax compliance, personal norms increase voluntary tax compliance while social norms affect tax compliance negatively. This implies that taxpayers comply because they fear tax audits, but taxpayers can also be negatively affected by the behaviors of peers not to pay taxes.
dc.identifier.citationNganga, A. W. (2024). Effect of government accountability on voluntary tax compliance of motor garages in Kenya [Strathmore University]. http://hdl.handle.net/11071/15483
dc.identifier.urihttp://hdl.handle.net/11071/15483
dc.language.isoen
dc.publisherStrathmore University
dc.titleEffect of government accountability on voluntary tax compliance of motor garages in Kenya
dc.typeThesis
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MBA Theses and Dissertations (2024)