Factors affecting revenue collection in Kenya Revenue authority

A Project Proposal Submitted to the School of Business in Partial Fulfillment of the Requirement for the Degree of Masters in Business Administration (MBA)The ever rising economic and financial needs of Kenya and the budget constraints that constantly exist threaten the sustainability and growth of the Kenyan economy. The purpose of this study was to examine the factors that affected, both positively and negatively, revenue collection in Kenya Revenue Authority (KRA) in Nairobi County. More specifically, it examined the effects of the Political Situation on Revenue Collection, the effects of Policies put in place by the incumbent policymakers and the effects of the KRA Support Systems on Revenue Collection. A descriptive research design was adopted as it addressed the research questions through empirical assessment involving numerical measurement and statistical analysis. The target population was taxpayers that fell under the bracket of large taxpayers. Although there were 675 taxpayers under this description, a sample of these was taken for the purpose of the study. Simple random sampling technique was used to select a sample of 252 taxpayers. The empirical study was conducted in businesses across 12 different sectors within Nairobi County between January 2014 and March 2014. Data analysis was done using statistical package for social scientists (SPSS). First, data was collected, cleaned, sorted and collated. Descriptive statistics and measures of association were used to examine the relationship between the independent and dependent variables. This was followed by analysis using inferential statistics such as Pearson correlation to examine the relationship between revenue collection and political stability. The analytical results revealed that the prevailing political situation did in-fact affect business operations, security of the people, as well availability and distribution of resources and as a result, tax collection and administration of tax laws. It also revealed that the policies in place at a specific point in time did affect the revenue collection for the jurisdiction. The research argues that the KRA support system which comprised of among others, Information Technology Systems, Human Resources and Stakeholders all played a significant role in the process of Revenue Collection in KRA. The study concluded that; although a stable political environment enhanced revenue collection, closeness to general elections posed hindrances to collection of revenue in Nairobi County. The findings also revealed that, although the tax laws and policies in place helped administration of organizations and achieved redistribution of wealth, they were not easy to understand or interpret. Also, the results of the analysis showed that the evolution of Information Technology has made compliance with tax laws easier. The study recommends further research to ascertain the extent to which the prevailing political situation affected revenue collection as well as the extent to which revenue collection affected the political situation in order to determine the level of independence or interdependence of the political situation and revenue collection. It also recommends further research on the tax laws and policies in place and their suitability to the people they govern. The study also recommends further research on taxpayers as stakeholders of KRA for the purpose of devising ways of ensuring compliance and satisfaction for our stakeholders