Effect Of Tax Payer Education On Tax Compliance Among Micro, Small And Medium Enterprises In Kajiado County, Kenya: A Case Of Ongata Rongai Constituency

Abstract

Taxes are financial obligations levied by the government on personal income, business profits, and the exchange of goods and services. Unfortunately, Kenya does not collect all the taxes it should on an annual basis, which leads to insufficient financial resources for achieving its economic development goals. This issue is largely attributed to high levels of tax non-compliance. In Kenya, the largest proportion of taxpayers in the business sector are Micro, Small, and Medium Enterprises (MSMEs). This study explored how taxation education influences tax compliance among MSMEs in Kajiado County, with Ongata Rongai constituency serving as a representative area. The study focused on three main objectives: to assess the impact of communication campaigns on tax compliance, to evaluate the effect of tax education in schools on tax compliance, and to investigate the influence of training for tax officers on tax compliance. The research was guided by the Theory of Planned Behavior and the Economic Deterrence Theory. A descriptive research design was adopted for the study, with a target population of 372 MSMEs in Ongata Rongai constituency. The sample consisted of 193 MSMEs, categorized into three groups: artisans, contractors, and general traders. Primary data was gathered using a structured questionnaire. To test the validity and reliability of the questionnaire, 20 MSMEs from Langata constituency were

randomly selected to complete it. The questionnaires were distributed via email and the drop-and- pick-later method. Once the data was collected, it was coded in a quantitative format to facilitate

analysis using SPSS version 25. The analysis employed both descriptive and inferential statistics, generating frequencies, percentages, and simple and multiple linear regression. The study revealed that tax communication campaigns, tax education programs, and tax officer training significantly influence tax compliance among MSMEs in Kajiado County. Institutions like the Kenya Revenue Authority (KRA) must ensure their officers receive adequate training to provide proper support and guidance to taxpayers. Additionally, organizing awareness campaigns and integrating tax education into school curricula are essential for raising awareness about the importance and benefits of paying taxes.