BUSINESS AUTOMATION SYSTEM AND TAX REVENUE GROWTH IN KENYA
James Nyamu, (PhD) - Tharaka University, Kenya
ABSTRACT
Tax reform is the process of changing the way taxes are collected or managed by the government. It may involve the adoption of a Value Added Tax (VAT), the expansion of the VAT, the elimination of stamp and other minor duties, the simplification and broadening of personal or corporate income or asset taxes, or the revision of the tax code to enact comprehensive administration and criminal penalties for evasion. itax system provides efficient way of improving revenue collection and transparency in fiscal administration (otieno John,2021). Institutional aspects of tax reform involve the Semi-Autonomous Revenue Authority Model, where traditional line departments are separated from the National Treasury and granted the legal status of semi-autonomous authorities. Tax reform involves broad issues of economic policy as well as specific problems of tax structure design and administration. KRA has been allocated more budgetary support to enhance pay structures of revenue Officers, attract and retain professional staff as well as establishing structures for identifying and dismissing incompetent and corrupt staff. This was necessary since efficient revenue collection was seen as a means to lower Government borrowing and easing pressure on inflation and interest rates as well as increasing Government revenues to meet both recurrent and capital expenditure. The study was based on Optimum income tax theory and focused on measures undertaken by KRA to bring reforms that have enhanced Tax revenue growth in Kenya in the recent few years. The scope of the study was KRA’s five (5) regional offices namely; Nairobi, Mombasa, Nakuru, Nyeri and Kisumu. The target population was 562 where a sample of 157 respondents was drawn using stratified random sampling technique. Both primary and Secondary data was collected using questionnaires which were both closed ended and open ended. Quantitative data was analyzed using SPSS where descriptive statistics were used and regression analysis was run to predict the role Business Automation System on Tax Revenue growth in Kenya. ANOVA test was conducted to test the significance of the overall model and a correlation analysis was used to determine the strength of relationship between Independent and Dependent variables. The study found that Business Automation system at KRA influences Tax revenue growth in Kenya significantly. The study recommended that for itax platform in KRA to be efficient, the same should be improved and upgraded to suit both government and citizens which should enhance Tax revenue collection and spur the Nation’s economic growth. The research findings were expected to benefit other researchers in public finance, KRA, County Governments as well as other Government revenue collection agents.