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Benard Kamita Gitu

Jomo Kenyatta University Of Agriculture And Technology


Dr. Allan Kihara

Jomo Kenyatta University Of Agriculture And Technology


CITATION: Gitu, B., K., & Kihara, A. (2017). Determinants Of Tax Compliance Amongst Small And Medium Enterprises In Gikomba Market, Nairobi County, Kenya. International Journal of Economics and Finance. Vol. 6 (6) pp 1 - 19



Globally, the issue of tax evasion by the Small and medium enterprises (SMEs) has remained a big challenge. Despite the potential for Small and medium enterprises to contribute to economic growth in terms of revenue generation, many governments have failed to achieve the target taxation turnovers from the same. The purpose of this study was to explore on the determinants of Tax Compliance amongst the SMEs in Gikomba market, Nairobi County, Kenya. Most of the SMEs cannot easily be located by tax administration and those who can be traced pay less than their fair share of tax. Locally, there has been diverse studies conducted on tax compliance but there is no study that has focused on compliance in tax payment amongst Small and Medium Enterprises . The failure of the government agencies to net the targeted tax amounts without any clear reasons further calls for a study on the same. The target population comprised of 1380 SMEs categorized in to manufacturing, trade and services. A combination of open ended and closed ended structured questionnaire was used to collect primary data from a sample of 138 SMEs obtained through a multistage sampling technique. The study embraced both qualitative and quantitative approaches. Qualitative approach helped to describe the opinions of the respondents directly as expressed. The information obtained was useful in conducting descriptive statistical analysis, and the results presented in form of graphs, charts and frequency tables. The coded data was keyed into a Statistical Package for the Social Sciences (SPSS) version 22. The SPSS software automatically generated descriptive statistics in form of percentage, means, frequency tables and standard deviations. The results confirmed that tax rate, tax information, tax compliance cost, technology and complexity of the tax systems have a great influence on tax compliance amongst the SMEs in Gikomba market. Based on the findings the research recommends a review of tax payment systems to make them simpler for ease of compliance, similarly a review of the tax rates based on the level of earnings would improve on compliance. In addition, there is need for public education to create awareness on tax system and requirements.


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