Attitudes towards tax practices of small scale public transporters(matatu): Case Study of Nairobi

Abstract

Tax. by its historic nature is viewed as a necessarv burden by the taxpayer but as an easv source of revenue by the tax Collector It is the pre-requisite for sustainable revenue base for any economy of whatever form and size In order for the Taxpayers to 'willingly' pay Tax. there must be a correspondence between the level/magnitude of Taxation and the micro and macro wellbeing of the Taxpayer. This study undertook to isolate the attitudinal factors that impact on the efficiency and acceptability of Taxation practice as it obtains in Kenya but specifically for the small scale (Juakali) Transport sub - sector. Specifically this study set out to achieve the following Objectives • Establish the attitudinal factors that impact on the Matatu Industry Employer and Employee Taxation Practices. • Determine the reasons why the suppliers of the Matatu sub -sector services do not comply with tax requirements. • Document Policy Implications from the Studv results Vis - a - Vis Tax collection Performance in the sub - sector. The population of study was stratified into two categories: Employer and Employee. Data collection units were selected using systematic random sampling. Out of the possible 3200 Matatus, 105 was selected for study purposes. Various factors impacting on tax practices was identified from the respondents. analysed using descriptive and non - parametric methods. From the study findings, those factors that would positively impact of tax collection performance and practices were discussed. To enhance positive influence on Taxation efficiency, a number of variables which include: employee/employer level of education, Age of Employer, Incentive Provision, Service Provision, Terms and Conditions of Employment, Mode and Period of Payment were found to be critical. Apart from these, Regular Awareness Campaign was found necessarv for sustainable Tax Collection process where the Taxed and the Taxing acquire and provide relevant information on the requirements of the Law as it pertains to Taxation. Chapter 5 of this report highlights a number of concluding remarks and ansmg recommendations, Various Policy Issues, which include infrastructural improvements, supplier driven Taxation process among others, were also derived.