The Effect of Electronic Tax Registers on Value Added Tax Administration in Kenya; a Case Study of Hotels in Nairobi County

Abstract

This study aimed at assessing The Effect of Electronic Tax Registers (ETRs) in Value Added Tax administration in Kenya. The study sought to determine how ETRs have aided in administration of VAT by Kenya Revenue Authority. Since many researchers have concentrated on tax evasion and tax avoidance, a lot has been desired especially in the area of VAT administration, tax audit time and cost as well as processing of VAT returns. The study objective was therefore to determine the effect of using Electronic Tax Registers (ETRs) in improving VAT administration in Kenya. The population of study was 90 Hotels in Nairobi County using ETR Machines and the sample consisted of 30 registered hotels which were selected using stratified random sampling. The main instruments used in collecting primary data were questionnaires. Secondary data was also used to augment primary data. The research focused on a survey on taxpayers using Electronic Tax Registers (ETRs). The purpose is to find out their opinions on aspects related to ETRs on VAT administration. The data collected was analyzed using descriptive statistics like percentages, standard deviations, frequency tables among others the Statistical Package for Social Sciences (SPSS) Version 17 software was used. From the research findings of the study it was identified that introduction of ETRs has greatly enhanced collection and filing of VAT as well as it has reduced tax audit time and cost and staff involved. Business owners in Nairobi County have also witnessed an increased improvement in collection and administration of revenue by the government as well as tax policies in operation of business.