Income tax compliance behavior of large and medium-sized business taxpayers in Kenya

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dc.contributor.authorAbdul, Farida
dc.date.accessioned2023-06-23T09:32:33Z
dc.date.available2023-06-23T09:32:33Z
dc.date.issued2019
dc.descriptionSubmitted in total fulfilment of the requirement for the degree of Doctor of Philosophy in Accounting at Strathmore University
dc.description.abstractThe main objective of this study was to establish the drivers explaining tax compliance behaviour among medium and large business taxpayers in Kenya. In so doing the researcher tested the validity and adequacy of the Theory of Planned Behaviour (TPB) and Procedural Justice Theory (PJT) in explaining tax compliance behaviour. A Structural Equation Model was built using survey data on 142 respondents and covering 19 key sectors of the economy. The study specifically sought to examine the influence of measures of perceived behavioural control, subjective norms, procedural justice measures, and tax system attributes (fairness, complexity, compliance costs as well as international compatibility) on tax compliance behaviour, while controlling for the hypothesized influence of firm size, age, sector and legal structure. The results indicate that tax compliance behaviour in Kenya significantly increases with increased perceived behavioural control, but declines significantly with an increase in tax compliance costs. In addition, the only firm characteristic that significantly increases with tax compliance is firm size. The model constructs account for about 39 per cent of variations in tax compliance behaviour in Kenya, which is above the empirically accepted minimum for exploratory studies. From the results, the study recommends a focus by the tax authority and policymakers on measures to reduce tax compliance costs. The authority should concentrate on those costs that relate to understanding the existing complex tax laws, changes in tax rules, as well as general costs of meeting compliance and regulatory requirements. In addition, greater emphasis should be put on investing in opportunities that reduce financial pressure on firms and on reducing incidences of firms that operate outside the tax system. Further, the authority should reduce incidences of financial distress in firms through prudent macroeconomic management and general surveillance to ensure that firms face minimal opportunities that would encourage them to underreport income- such as incomes not reported by third parties. The significance of the perceived behavioural control measure indicates the relevance and applicability of the theory of planned behaviour to tax compliance behaviour in Kenya.
dc.identifier.urihttp://hdl.handle.net/11071/13342
dc.language.isoen
dc.publisherStrathmore University
dc.titleIncome tax compliance behavior of large and medium-sized business taxpayers in Kenya
dc.typeThesis
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