Abstract

This study sought to determine the effect of online tax system on tax compliance among micro, SMEs at Kangemi Harambee market in Kenya. The specific objectives were to determine the effect of online tax registration on tax compliance, to assess the effect of online tax filing on tax compliance and to evaluate the effect of online tax remittance on tax compliance among micro, SMEs at Kangemi Harambee market. This study adopted the descriptive research design. The study’s target population encompassed 656 small enterprises’ at Kangemi Harambee Market in Kenya. The Yamane (1967) Formula for calculating sample size was adapted to pick 248 respondents. Stratified random sampling and simple random sampling technique was used to select vendors from the market. Questionnaires were adapted as the main data collection instruments. Data was analyzed by the SPSS software version 24. The study found that online tax registration, online tax filing and online tax remittance had a positive and significant effect on tax compliance among SMEs at Kangemi Market, Kenya. The study recommends that training needs to be done by KRA to all SMEs to ensure they understand the online tax filing system.