EFFECT OF TAX FILLING PROCEDURE AND ACCOUNTABILITY ON TAX COMPLIANCE AMONGST SMES IN NAKURU COUNTY KENYA

Abstract

The study aimed at determining the effect of filling procedure and accountability compliance amongst SMEs in Nakuru County Kenya. The study employed descriptive research design. The data collection was done by asking the respondents structured and pre-determined questions. The target population of the study comprised of Small and medium Enterprises in Nakuru County which were 1,425 SMEs operating within the township, concentrating within the manufacturing, trade and services sectors. The study adopted stratified random sampling technique to select 10% of the target population therefore giving a sample size of 142 respondents and the valid respondents in the study were 119 respondents. The researcher utilized questionnaire as the essential instrument for information gathering. Data gathered from correctly filled questionnaires were coded, tabulated and analyzed using SPSS by both descriptive statistics which include mean and standard deviation to capture the characteristics of the variables under study. Inferential statistics were also used to analyze the relationship of tax compliance and the filling procedure and accountability. The results were then presented through Figures and Tables. Regression results revealed that filling procedure and accountability had positive and significant effect on tax compliance amongst SMEs in Nakuru County Kenya. This means that an increase in tax payers knowledge and tax rates led to an improvement in tax compliance.: The study recommended that filling procedure should not be complex so as to not contribute to wrong tax returns, also lessen measure of time taken for organizations to round out various structures with comparative data, moreover the study recommended there to be Tax accountability and transparency with greater emphasis on the various kinds of taxes such as Personal Income Tax, Companies Income Tax, Petroleum profit Tax, Duties and value Added Tax since they are perceived to have a direct correlation with the Gross Domestic Product (GDP).