Browsing by Author "Mutai, Clara"

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    Tax Audits and Tax Compliance in Kenya Revenue Authority, Kenya
    (Kenyatta University, 2025-08) Mutai, Clara
    Taxation plays a crucial role in financing a country's expenditure by generating revenue that funds public services, infrastructure, and government functions, contributing significantly to economic stability and development. Despite surpassing its revenue target in 2020/2021, Kenya Revenue Authority (KRA) faced a shortfall of approximately Kshs. 70 billion (around 4.2%) in 2021/2022, and a further shortfall of Kshs. 100 billion (about 5.3%) in 2022/2023, indicating persistent challenges with tax compliance. Therefore, the study sought to examine how tax audits affect tax compliance in Kenya Revenue Authority. The specific objectives of the study were to examine the effect of desk audit, field audit, correspondence audit and back duty audit on tax compliance in Kenya Revenue Authority. This research was anchored on economic deterrence theory, cognitive dissonance theory, social norms theory and theory of planned behavior. The study adopted an explanatory research design. The unit of analysis in this study was Kenya Revenue Authority. The target population was all 232 staffs in seven departments in Kenya Revenue Authority. Yamane's Formula was utilized to establish study sample size. Using this formula, 146 respondents were selected from target population. The study utilized both primary and secondary data. Moreover, secondary data was acquired from Kenya Revenue Authority yearly reports. Primary data was collected using semi-structured questionnaires. Moreover, questionnaires will produce qualitative and also quantitative data. Moreover, thematic analysis was utilized for qualitative data analysis and the findings shall be displayed in narrative format. Further, descriptive and inferential statistics was deployed in analyzing quantitative data with assistance of SPSS version 24. Descriptive statistics comprise of mean, standard deviation, percent and frequencies. Inferential statistics included correlation analysis and regression analysis. Diagnostic tests in the study included the normality test, linearity test, autocorrelation test, multicollinearity test and also heteroscedasticity test. The study results were then displayed in figures and tables. Ethical considerations were strictly adhered to, with informed consent gathered from participants, confidentiality ensured through the secure handling of data, and anonymity maintained by not recording personal identifiers. The study found that desk audit had a positive and significant effect on tax compliance in Kenya Revenue Authority. Further, field audit had a positive and significant effect on tax compliance in Kenya Revenue Authority. In addition, the study found that correspondence audit had a positive and significant effect on tax compliance in Kenya Revenue Authority. Also, the results indicated that back duty audit had a positive and significant effect on tax compliance in Kenya Revenue Authority. The study concluded that desk audit, field audit, correspondence audit, and back duty audit all have a positive and significant effect on tax compliance within the Kenya Revenue Authority. The study recommends that Kenya Revenue Authority should strengthen desk audits by requiring more comprehensive documentation from taxpayers and expand field audits to include in-person visits, including home assessments. In addition, Kenya Revenue Authority should improve correspondence audits using emails and phone calls for clarification, while enhancing back duty audits through increased taxpayer appointments and financial record analysis. Further, the study suggests further researches on tax audits and tax compliance in Kenya from perspective of taxpayers.