https://atcr.kra.go.ke/index.php/atcr/issue/feed African Tax and Customs Review 2022-07-01T16:19:23+03:00 Ms. Alice Kiama alice.kiama@kra.go.ke Open Journal Systems <p>African Tax and Customs Review (ATCR) is a Quarterly Review dedicated to high quality scholarly and technical articles on Taxation, Customs, Fiscal Policy and Management, Public Finance and related disciplines. The main objective of ATCR is to provide a platform for policy makers, scholars, practitioners, experts, academicians, and researchers to share contemporary thoughts in these fields. While the general layout of ATCR largely conforms to a typical format of an academic journal, its substance encompasses much more.&nbsp;The contents of this Quarterly Review include research articles, tax policy reviews, tax rulings, expert opinions and emerging issues. In this respect, ATCR aims to be a thought leader in Taxation, Customs, Fiscal Policy and Management, Public Finance and related disciplines in Africa, and a reference point for the rest of the world on these critical disciplines.&nbsp;The key mission of ATCR is therefore, to avail a platform for use by researchers, scholars, academicians, experts and practitioners who seek to investigate, more deeply and incisively, the emerging frontiers of Tax and Customs Policy and Administration in Africa. By so doing, they should be in a much better position to design and utilize homegrown research approaches and tools capable of confronting the continent's fiscal challenges.</p> https://atcr.kra.go.ke/index.php/atcr/article/view/98 Effect of Tax Incentives On Financial Performance of Domestic Airlines in Kenya 2022-07-01T16:19:21+03:00 John Gaturo Chege johngaturo@gmail.com <p>8The profitability of the airlines in Kenya has been dismal over the years unlike their counterparts in the region. Studies relating to effect of tax incentives were done in developed and other developing countries other than Kenya. Similarly, some of these studies did not focus on domestic airlines. The current study sought to address the research gaps in literature by focusing on the effect of tax incentives on financial performance of domestic airline companies in Kenya. Therefore, the specific objectives of the study are: To establish the effect of capital allowances, export promotion incentives, tax holidays and VAT exemption on financial performance of domestic airlines in Kenya. The study results are expected to go a long way in benefitting various beneficiaries such as the government, researchers, researchers and academicians and corporate tax payers. The research was guided by Peacock Wiseman Theory of Public Expenditure, optimal tax theory, q theory of investment and Agency theory. The study adopted a descriptive research design where a census was used. The target population was the 15 Domestic airlines in Kenya. Data was collected from audited annual financial reports for individual firms found on the company’s website and library. The study collected data for a period of 5 years 2014-2018. The study analyzed data by use of inferential and descriptive statistics that consist of mean, standard deviation, regression and measures of variations. The study concludes capital allowances incentives had a direct effect on the financial performance of domestic airline companies in Kenya. Some of the capital allowances enjoyed by domestic airline companies in Kenya include wear and tear allowances, and investment deduction. during the 5-year period (2014 to 2018) the capital allowance incentives to domestic airline companies has exhibited a dense volatility trend and wear and tear allowances are charged on capital expenditure on machinery and equipment led to positive financial performance of domestic airline companies in Kenya. The study concludes that provision of export promotion incentives promotes financial performance of domestic airline companies in Kenya, there exists a positive correlation coefficient between performance of domestic airline companies and export promotion. The study concludes that tax holidays had a direct significant influence on financial performance of domestic airline companies in Kenya, tax holidays by the current regime enables the domestic airlines to start and stabilize, tax holidays enable domestic airlines firms. The study concludes that VAT exemption incentives had a direct significance on financial performance of domestic airline companies in Kenya. The study recommends that the stakeholders in tax policy should reconsider the economic value of capital allowances incentives. The Government of Kenya should increase the capacity for it to incentives and negotiate for mutual and better benefits with the domestic airlines and other investors. The Government of Kenya should consider increasing the tax incentives granted to attract foreign direct investment, especially those provided to domestic airlines and other investors.</p> 2022-07-01T16:18:30+03:00 ##submission.copyrightStatement## https://atcr.kra.go.ke/index.php/atcr/article/view/99 Effect of Adoption of Electronic Cargo Tracking System On Excise Revenue Collection in Kenya A Case of Jomo Kenyatta International Airport 2022-07-01T16:19:22+03:00 Zedekiah Ochieng Odago zedekiah.odago@gmail.com <p>Over the years, Kenya Revenue Authority has implemented reforms and modernization programs geared towards positioning it as an efficient modern tax administrator. Despite the positive developments, KRA has continued to miss revenue targets partly attributed to taxpayer’s noncompliance and inefficiencies in revenue management systems. To mitigate lack of adequate revenues, Ministry of Finance has continuously revised up its fiscal deficit on a number of occasions. Electronic Cargo Tracking System is a modern computer-based assessment system that was introduced by the Kenya Revenue Authority Customs department, to monitor cargo and improve revenue collection. The study aimed to determine the effect of adoption of electronic cargo tracking system (ECTS) on excise revenue collection in Kenya - a case of Jomo Kenyatta International Airport (JKIA) as an entry and exit point. The study was guided by the following specific objectives; to determine how cargo monitoring affects excise revenue collection at JKIA in Kenya; to investigate whether Information Sharing affects excise revenue collection at JKIA in Kenya; to establish if cargo Security has effectively contributed to excise revenue collection at JKIA in Kenya. The study adopted explanatory research design. The target population comprised of 300 Customs and technical staff of Kenya Revenue Authority stationed at JKIA Customs department. Stratified random sampling was used to identify the population which was Customs and technical officers assigned to ECTS. Modern portfolio theory, Diffusion of innovation theory, Technological determinism theory, Infusion theory of technology and Technological acceptance model are the theoretical frameworks that guided the study. The study employed primary data collection by closed ended structured questionnaire using five-point Likert scale. The findings of the Multiple regression analysis revealed that Cargo Monitoring positively and significantly influenced Excise Revenue Collection (β<sub>1</sub>=0.221, p=0.003): Cargo Security positively and significantly influenced Excise Revenue Collection (β<sub>2</sub>=0.334, p=0.000); Information Sharing positively and significantly influenced Excise Revenue Collection (β<sub>2</sub>=0.357, p=0.000). Therefore, the study concluded that adoption of Electronic Cargo Tracking System (ECTS) has had significant effect on Excise Revenue Collection in Kenya, as shown by the increase in excise revenue from Sh. 80 billion in 2010 to 165 billion in 2018. From the results, the study recommends that Kenya Revenue Authority should fully strengthen Cargo Monitoring, Cargo Security and Information Sharing in order to realize additional Excise Revenue Collection at JKIA. The study suggests that future research can evaluate other factors that affect Excise Revenue Collection at JKIA</p> 2022-07-01T16:19:01+03:00 ##submission.copyrightStatement## https://atcr.kra.go.ke/index.php/atcr/article/view/95 Effect of new technology adoption on logistics performance of transport operators at inland container depot Nairobi 2022-07-01T16:19:21+03:00 Caroline Murugi cmurugi98@gmail.com <p>Logistics companies suffer from inefficiency and insecurity in order to guarantee their profitability and growth. This has prompted integration of new technology into their operations through automation adopted by the customs department under Kenya Revenue Authority. This is to improve supply chain agility, power up operations, reduce cycle time, achieve higher efficiency and deliver products on time and reduce operations costs. From the selection of information, sorting of information, strengthening custom’s protection of consumers from counterfeit products to the real-time tracking of cargo, it is becoming a requirement to use new technologies to meet customer service expectations and raise the productivity of the workforce. This study sought to investigate the effect of new technology adopted by customs on logistics performance in Nairobi. The specific objectives were to determine the effect of the adoption of the single window system, cargo scanner management system, and electronic cargo tracking system on logistics performance. Resource advantage theory of competition, task technology fit theory and instrumental theory of technology are the theories that guide the study. It adopted an explanatory research design. The target population were 300 customs officers and managers of logistic companies within Nairobi. A sample of 171 customs officers and logistics managers were selected using stratified random sampling technique. Data was collected using structured questionnaire. The descriptive and inferential statistical analysis techniques were employed by the study. To investigate the relationship between the independent variables and dependent variable, correlation and multiple regression analysis was used. Correlation analysis established the strength of linear association between the variables. On the other hand, a multiple linear regression model tested the significance of the influence of the independent variables on the dependent variable. Findings revealed that single window system (β=0.389, p=0.000), electronic cargo tracking management systems (β=0.268, p=0.000) and cargo scanner management solution (β=0.330, p=0.000) have a positive and significant effect on the logistics performance of transport operators. The study concluded that single window system, electronic cargo tracking management systems and cargo scanner management system contribute significantly to increase in logistics performance. The study recommended that customs department needs to constantly update its information technology infrastructure to incorporate the latest artificial intelligence software. This helps in speeding up the tracking systems and providing real time and reliable information. The study likewise recommends the adoption of e-government standards and in particular of standardized e-customs solutions as well as political and societal impact of e-customs policies. The customs department officials, logistics companies, and technological providers need to scale up their collaborative activities in advancing the application of single window system, electronic cargo tracking management systems and cargo scanner management system in supply chains for better performance of logistics.</p> 2022-07-01T16:15:16+03:00 ##submission.copyrightStatement## https://atcr.kra.go.ke/index.php/atcr/article/view/96 Impact of Taxpayer Education On VAT Compliance Among Hotels in Kisumu County 2022-07-01T16:19:22+03:00 Phoebe Aluoch Olooh phoebe.olooh@gmail.com Kilonzi Felix felix.kilonzi@kra.go.ke <p>The study aimed at assessing the impact of taxpayer education on VAT compliance among Hotels in Kisumu County. Specifically, the study sought to determine the effect of print media axpayer education, electronic taxpayer education and taxpayer sensitization programs on VAT compliance. This study was guided by three theories namely: The Fiscal Psychology Theory, the Economic Deterrence Theory and the Ability to Pay Theory. The study adopted a descriptive research design. A total of 250 hotels operating in Kisumu County were targeted. Stratified random sampling was used to select 153 hotels. The study gathered primary data with the help of questionnaires. Data collected was analyzed using Statistical Package for Social Sciences (SPSS) and the study findings presented in the form of tables and figures. The findings would reveal whether taxpayer awareness, taxpayer perception, attitude, and imposition of fines and penalties have a significant effect on VAT compliance. Based on correlation beta coefficients, the study established that taxpayer sensitization programs (β=.455) had largest effect on VAT compliance followed by electronic taxpayer education (β=.124) and lastly print media taxpayer education (β=.102). The study concluded that taxpayer education had significant effect on VAT compliance. The study recommends that the Kenya Revenue Authority should&nbsp;&nbsp; invest more in tax sensitization programs like forums, seminars and this may be misplaced given that the focus of this study is taxpayer education, furthermore this suggestion requires legal authorization for KRA to implement with least emphasis on print media channels.&nbsp; The policy makers at Kenya Revenue Authority in designing taxpayer education programs should focus more on enhancing the existing taxpayer sensitization programs and e-taxpayer’s education channels since this would greatly enhance VAT compliance.</p> 2022-07-01T16:16:21+03:00 ##submission.copyrightStatement## https://atcr.kra.go.ke/index.php/atcr/article/view/97 Factors Affecting Turnover Tax Compliance Among Micro Small and Medium Enterprises in Roysambu, Nairobi 2022-07-01T16:19:23+03:00 Jesse Muthinji j.muthinji@gmail.com <p>The purpose of the study was to analyze factors affecting Turnover Tax Compliance in micro, small and medium enterprises (MSMEs) sector in Roysambu area in Nairobi. The study was guided by three objectives namely; to determine the effects of economic factors on Turnover Tax Compliance in Roysambu area, to determine the effects of political factors on Turnover Tax Compliance in Roysambu area and to determine the effects of psychological factors on Turnover Tax Compliance on MSMEs in Roysambu area. The problem statement was to assess whether the government efforts to reach small traders by introducing turnover tax was enhancing tax compliance among MSMEs. The study was guided by economic theory, social influence theory and theory of reasoned behavior. The study will greatly benefit the government of Kenya since it will contribute to lasting solutions of non-compliance with tax laws in Kenya, this will help Kenya Revenue Authority to meet or reduce the tax revenue collection target gap. The study will also provide insights to the policy makers on the factors to consider while making laws to ensure tax noncompliance level is reduced to minimum levels, this will also go hand in hand in coming up with efficient and effective tax collection policies and systems. The study will help the taxpayers to know what they are supposed to do for them to comply, also help them to know what await them if they do not comply. The study adopted the descriptive and explanatory survey design. The target population was 11,501 respondents.&nbsp; The study collected primary data from a sample of 386 taxpayers which were selected through random sampling. The data collected was tested for validity and reliability and analyzed and economic factors, political factors and psychological factors were found to have significant effect on Turnover Tax Compliance. Multiple regression analysis were performed with; economic factors on Turnover Tax Compliance on Roysambu evidence of p=0.006, ρ&lt;0.05, on political factors on Turnover Tax Compliance Roysambu evidence of p=0.003, ρ&lt;0.05 and psychological factors on Turnover Tax Compliance Roysambu evidence of p=0.000, ρ&lt;0.05. The study then made conclusions on economic factors, political factors and psychological factors that all the independent variables were found to play a significant role in the Turnover Tax Compliance on MSMEs in Roysambu area. The study recommended that KRA should pay attention on Tax rates which affect compliance and amount of tax payable, KRA should also satisfy taxpayer by services offered which will make taxpayer trust the Government. Finally, KRA should look into Perceived pressure that influences Turnover Tax Compliance. Therefore, the study suggests the need for more studies to explore the contribution of determinants of Turnover Tax Compliance in Kenya in more detail.</p> 2022-07-01T16:17:33+03:00 ##submission.copyrightStatement##