Tax Compliance: An Examination Of Kenyan Law And Policy

ABSTRACT

This study was an attempt to examine the extent to which tax administration affects tax

payer's compliance. The study was guided by the following objectives; to show the need

for co-existence between tax enforcement and demonstrate that enforcement undermines

voluntary tax compliance, to show how taxpayers compliance is complex and therefore the

need to put in place measures orchestrated at achieving tax compliance, to reveal

suggestions which may influence' and bring forth tax compliance. This research entailed

secondary mode of data collection and in addition literature review were applied in order

to collect data. The study mainly focused on the effectiveness of tax administration in

Kenya and how the whole process affects the level of tax payer's compliance. The study

thus revealed that tax administration in Kenya is not effective as it is subjected to complex

and opaque laws, lack of enough resources by the authority, lack of necessary

professionalism, lack of clear, simple and user friendly administrative systems and

procedures and above all lack of public support for set priorities. On the other hand, it was

found out that tax payer's compliance is determined by the government fiscal policy, tax

enforcement systems, perceptions of tax payers, fairness of the tax system services

provided by the government in return.

The study further revealed that the mode of tax administration greatly determines how

compliant and responsive tax payers will be. Issues such as routine training of Kenya

Revenue Authority staff, fair assessment of tax payers in which they are consulted as well

as fi·equently seeking responses and suggestions from tax payers are crucial factors that need not to be under estimated while administering taxes.