This research analysed the tax gap and way of expanding tax base among Smes in Kamukunji Jua-Kali Metal in Nairobi County, Kenya. The research study specific objectives were to: identify the effect of legislation, establish the effect of corruption, explore the effects of knowledge and to establish the effect of low income on tax gap among SMEs in Kamukunji Jua-Kali Metal in Nairobi County, Kenya. The study findings are of significance to the government, importers, exporters, researchers and scholars. This study applied a mixed methods research approach. The study targeted 4000 SMEs dealing in agricultural products, building supplies, Kitchen wares (cooking) and Electrical Appliances. Primary data was used and triangulated with secondary data in the study. Primary data was collected by the use of questionnaires and the secondary data was collected from the relevant books and journals that aided the researcher in conducting the study. Multiple regression was used to represent the relationship between the dependent and independent variables of the study. Tables and graphs were used to represent data in this study. The findings show that SMES have complied with the existing laws on taxation although majority of respondents were neutral. On whether SMEs have upheld high tax morality, majority of respondents disagree. On whether SMEs have knowledge on various taxes they should pay, majority of respondents disagreed. Majority of respondents disagreed that SMEs have been experiencing low profitability. The study concludes that, SMEs have not fully complied with the existing taxation laws thus increasing the tax gap. They have not fully complied with the existing taxation policies thus increasing the tax gap. The tax authority has not invested resources in tax education which contributed to little knowledge on various taxes that SMEs should pay, this contributes to increase in tax gap. SMEs had registered some profitability but failed to comply with taxation. They did not benefit from tax subsidies since they had not complied with the relevant taxation laws thus leading to increased tax gap. This study, therefore, recommends that SMEs need to comply with the existing laws and policies so as to reduce the tax gap. Kenya revenue authority should carry awareness among SMEs on the importance of tax morality. Stiff penalties and even jail terms should be imposed on those who colluded to engage in tax immorality. KRA should invest resources aimed at creating awareness on the importance of tax compliance among the SMEs and also come up with an effective method of measuring the profitability of SMEs to ensure that the right taxes are paid.