African Tax and Customs Review

The Moderating Effect of Green Investment on the Relationship between Tax Incentives and Tax Revenue Collection from Companies Listed at the Nairobi Securities Exchange, Kenya

2025-07-02T17:23:32+03:00

This study's main goal was to ascertain how green investment affected the relationship between tax incentives and tax revenue collection from Kenyan companies listed on the Nairobi Securities Exchange. Finding out how corporation tax incentives affect tax revenue collection from companies listed on the Nairobi Securities Exchange, Kenya; how value-added tax incentives affect tax revenue collection from companies listed on the Nairobi Securities Exchange, Kenya; how customs incentives affect tax revenue collection from companies listed on the Nairobi Securities Exchange, Kenya; and figuring out how green investment influences the relationship between corporation tax incentives, value-added tax incentives, customs tax incentives, and tax revenue collection from companies listed on the Nairobi Securities Exchange, Kenya have been the specific goals of the study. The triple bottom line theory served as the study's main theoretical framework. This study, which used an explanatory research approach, examined secondary data gathered over a five-year period from 2019 to 2023 to focus on the sixty-seven businesses listed on the Nairobi Securities Exchange. The Capital Markets Authority's standards for listed firms include the publication of sustainability reports and audited financial reports, which is how the study acquired its data. Correlation and multiple regression analysis were used to analyze descriptive and inferential statistics. Corporation tax incentive has a positive and significant effect on tax revenue collection with β1 = 0.0226592 (p = 0.043 < 0.05). VAT incentives have a positive and significant effect on tax revenue collection with β2 = 0.0093434 (p = 0.011 < 0.05). Customs duty incentives have a positive and significant effect on tax revenue collection with β3 = 0.0000221 (p = 0.000 < 0.05). The study found that green investment moderates the relationship between: Corporation tax incentive and tax revenue collection, with a coefficient of β5 = 0.0000123 (p = 0.010 < 0.05). VAT incentives and tax revenue collection, with a coefficient of β6 = 0.00000881 (p = 0.000 < 0.05). Customs duty incentives and tax revenue collection, with a coefficient of β7 = 0.00000476 (p = 0.004 < 0.05). Recommendations in view of the study's conclusions that tax incentives have a positive impact on tax revenue collections, the Kenyan government ought to think about updating and growing its tax incentives program, especially the ones related to corporation tax, VAT, and customs duty, in order to promote compliance and boost investment. Government incentives for environmentally sound behaviors and investments should be strengthened in light of the moderating influence of green investment on the relationship between tax incentives and tax revenue collection. This can entail providing tax exemptions or other financial incentives to businesses who use eco-friendly products, energy-saving procedures, or recycle their waste. Research recommendations included conducting a study to look into how tax reforms have affected Kenya's ability to collect taxes. One possible course of action would be to carry out research on how digitizing tax systems affects tax revenue collecting.

Dispute Resolution Mechanisms, Trust and Value Added Tax Compliance among Tax Agents in Nairobi County, Kenya

2025-07-02T17:23:33+03:00

Taxation serves as a crucial source of government income in nearly all nations, enabling the government to provide public goods and services. As a result, tax compliance is essential for economic stability, with tax revenue playing a key role in national development. The main objective of the study was to investigate the moderating influence of trust on the relationship between tax dispute resolution processes and Value Added Tax compliance among tax agents in Nairobi County, Kenya. Specifically, the study aimed to examine the effect of negotiation, internal reviews, and alternative dispute resolution methods Value Added Tax compliance among these agents. The research was grounded in several theories, including the Theory of Optimal Taxation, Conflict Management Theory, the Unified Theory of Acceptance and Use of Technology, and Social Interest Theory. An explanatory research design was utilized for the study, targeting 321 tax agents in Nairobi County, with a final sample size of 178 respondents. Out of 178 questionnaires distributed, 134 were properly filled out and returned, yielding a 75% response rate. The study relied on primary data collected via questionnaires, which was analyzed using descriptive and inferential statistical methods. A multiple linear regression model was employed to determine the strength of the relationships between the independent and dependent variables. The first objective, which explored the effect of negotiation, found a significant positive correlation with VAT compliance (β = 0.320, p < 0.05). The second objective, focused on internal reviews, also showed a significant positive relationship with VAT compliance (β = 0.009, p < 0.05). The third objective, examining alternative dispute resolution, revealed a similarly positive effect on VAT compliance (β = 0.386, p < 0.05). The fourth objective analyzed how trust moderates the relationship between dispute resolution mechanisms and VAT compliance, showing that trust significantly amplifies the effects of negotiation (β = 0.211, p < 0.05), internal reviews (β = 0.251, p < 0.05), and alternative dispute resolution (β = 0.452, p < 0.05). Additionally, factors such as age (β = 0.235, p < 0.05) and education (β = 0.218, p < 0.05) were found to be positively linked to VAT compliance. The study recommended that the Kenya Revenue Authority (KRA) invest in extensive training programs to enhance the negotiation abilities of tax agents. the government should consider implementing policies aimed at training tax agents in effective negotiation and dispute resolution, by investing in skills development programs for tax agents, policymakers can improve interactions between agents and taxpayers, leading to higher compliance rates. KRA should invest in building trust with taxpayers by making dispute resolution mechanisms accessible and equitable. Ensuring that these mechanisms are transparent, fair, and efficient will reinforce trust, which was found to enhance the impact of negotiation, internal reviews, and ADR on compliance. Future research should explore the influence of the regulatory framework on VAT compliance.

System Automation, Taxpayer Perception and Value Added Tax Compliance among Small and Medium Enterprises in Eldoret Town, Kenya

2025-07-02T17:23:33+03:00

The specific objectives were to determine the effect of Digital payment process, Tax invoice management system and Withholding Value Added Tax system on Value Added Tax compliance among small and medium enterprises in Eldoret town, Kenya. Additionaly to determine the moderating effect of taxpayer perception on each effect of the relationship. The study was anchored on the following theories: Diffusion of Innovation (DOI) Theory, Technology Acceptance Model, Ability to pay Theory and Theory of planned behaviour. The research design for this study was explanatory research design. The population of this study was 3872 SMEs in Eldoret town with a sample size of 362 SMEs who are SMEs owners/Managers. A questionnaire was used to collect primary data and analysis included both descriptive and inferential statistics. Descriptive statistics involved the use of mean standard deviation and variance while infrarational statistics included correlation and hierarchical regression. The study found out that digital payment process, Tax invoice management system, Withholding VAT system Taxpayer perception. have a positive and significant effect on Value Added Tax compliance. A unit change in withholding VAT system causes an increase of 0.553 in Value Added Tax compliance. A unit change in taxpayer perception causes an increase of 0.276 in Value Added Tax compliance. Improvement in Value Added Tax compliance is caused by a unit change in Tax invoice management system. The findings also indicated that there is a positive moderating effect of taxpayer perception on relationship between :( Digital payment process (Δ R2= 0.005., β =0.109, P value was < 0.05), Tax invoice management system (Δ R2=0.002, β =0.041, p value is < 0.05) and Withholding VAT system (Δ R2=0.004, β =0.103, p value is < 0.05) and Value Added Tax compliance. KRA is recommended to explore the implementation of Tax invoice management system and provide guidance on their setup and operation. KRA is also recommended to facilitate awareness campaigns highlighting the positive impact of such systems on Value Added Tax compliance. Future research may be concluded to find out whether or not other factors such as tax incentives and compliance cost have influence on Value Added Tax performance