Corporate Structure and Revenue Collection by Kenya Revenue Authority in Nairobi, Kenya
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Date
2019-06
Authors
Gwaro, Peter M.
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
The Kenya Revenue Authority is the government revenue collecting institution which remits the collected revenues to the treasury for the government to be able to spend in various expenditures. The trend of revenue collection by Kenya Revenue Authority over the past years has experienced a declining trend, for instance the growth in 2009/2010 was 11.33percent, 2010/2011 was 18.81percent, 2011/2012 was 11.36percent, 2012/2013 was 7.43percent, 2013/2014 was 26.90percent and 2014/2015 was 3.86 percent. As a result, the study identified objectives in order to analyse the effect of corporate structure in revenue collection in Kenya Revenue Authority. These objectives involved determining the effect of board size on revenue collection at KRA, to analysing the effect of board independence on revenue collection at KRA, and to find out the effect of board composition on revenue collection at KRA. The study used structural contingency theory, agency theory, and stakeholder’s theory to provide the foundation for the study. Empirical literature was provided where previous relevant studies were highlighted, providing the methodology and outcome. The study targeted Kenya Revenue Authority. The data used in this study was only secondary data which was gathered from the KRA website publications and journals that related to the current study. So as to achieve the specific objective set by this study the data was analysed by the use of descriptive and inferential statistics. These tests were done using the SPSS v.21.The study presented that positive change in board size resulted positive change in revenue collection. The coefficient presented that positive change in board independence resulted positive change in revenue collection. The coefficient presented that positive change in board composition resulted in negative change in revenue collected. KRA revenue collection and board size relationship was found to be positive and significant. The study concluded that the relationship between board independence and revenue collection was positive and significant. The study concluded that the relationship between board composition and revenue collection was negative and significant. Based also on the coefficient of determination and coefficient of correlation values, the study concludes that board size and board independence were strongly positively correlated to revenue collection while board composition was weakly and negatively correlated to revenue collection. The study also indicated that revenue collection was determined strongly by board size and board independence and weakly determined by board composition. The study recommended that the members of the board should be of the required size and the number of independent directors increased since their effect on revenue collection is positive and significant. The study recommended the proportionate ratio of independent board of directors should be increased to a minimum of 5 independent directors. The study suggested that the ratio between non-executive and executive board members should be reduced since their effect on revenue collection was negative
Description
A Research Project Submitted to the School of Business in Partial Fulfillment for the Requirement of the Award of Degree of Master in Business Administration Finance Option in Kenyatta University, June, 2019