Operational Risk Management Practices and Performance of Kenya Revenue Authority in Collection of Tax Revenue in Kenya

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dc.contributor.advisorMark Suvaen_US
dc.contributor.authorKariuki, Stephen Maina
dc.date.accessioned2024-02-05T06:43:29Z
dc.date.available2024-02-05T06:43:29Z
dc.date.issued2023-11
dc.descriptionA Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment to the Requirements for the Award of a Degree in Master of Business Adminstration (Finance Option) of Kenyatta University, November 2023.en_US
dc.description.abstractEvery government has an institution that is entrusted the role of collecting tax on behalf of the government. In Kenya the entity that has bestowed the role of collecting and mobilizing taxes is Kenya Revenue Authority which was established by an act of parliament in 1995. The entity has a board of directors, the day to day operations of KRA is done by the Commissioner General. KRA has been falling short of meeting its tax revenue targets and thus the need to reevaluate risk management process with an aim of mitigating risk affecting its performance. Tax revenue collection constitutes an important part of national economic growth it is one of the critical ingredients of a healthy Gross Domestic Product. Moreover, the collection of tax cannot be effective without a proper functioning risk management system which entails risk identification, risk analysis, risk control and risk evaluation. These practices enhance the capacity of an organization to do better in collection of the much needed resources for prosperity and growth. This study evaluates the important relationship between risk management practices and performance of Kenya Revenue Authority in terms of tax revenue collection. It examines the aforesaid risk management practices of risk in relation to tax revenue collection performance of KRA, with the ultimate intention of benefiting policy makers and academicians in the same quest. The main goal of this research was to establish the effect of risk management practices on the performance of Kenya Revenue Authority in collection of national revenue in Kenya. The study's time frame was from 2018 to 2022. The study was anchored on four theories namely; Neo- institutional theory, stakeholder theory, contingency theory of management and the agency theory. The study adopted a descriptive research method, from a population of 3906 KRA employees a total of 294 divisional representatives were sampled using a mix of stratified, purposive and judgmental sampling. To the representatives of KRA there was a survey questionnaire structured according to the objectives of the study. The questionnaire was presented on a drop- and-pick method in order to ensure high response rate. In two steps, the data was coded and examined. In the first stage there was confirmatory factor analysis, the second stage was structural regression equation model. The imminent primary data was coded and analyzed statistically using R in lavaan programing language. Under the assumption of no linearity the data was analyzed using the structural equation model methodology to specifically identify the confirmatory factor structure followed by a measurement model in the form of multiple regression. The model was diagnosed using normality, model identification status testing, multicollinearity and model fit diagnostics of fit test, this was done by standardizing all the covariances. As part of ethical consideration the researcher created rapport with the respondents by assuring them of utmost confidentiality and presenting them with an authorization letter from NACOSTI. From the findings, risk analysis and risk identification had significant positive effects while risk control and evaluation had positive but insignificant effects on KRA performance in national revenue collection. Policy recommendations from this study are that KRA can improve revenue collection performance by exploiting the potential in harmonizing the application of risk analysis and risk identification practices.en_US
dc.description.sponsorshipKenyatta universityen_US
dc.identifier.urihttps://ir-library.ku.ac.ke/handle/123456789/27492
dc.language.isoenen_US
dc.publisherKenyatta Universityen_US
dc.subjectOperational Risk Management Practices and Performanceen_US
dc.subjectKenya Revenue Authorityen_US
dc.subjectCollection of Tax Revenueen_US
dc.subjectKenyaen_US
dc.titleOperational Risk Management Practices and Performance of Kenya Revenue Authority in Collection of Tax Revenue in Kenyaen_US
dc.typeThesisen_US
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