Journal of Accounting and Taxation
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Article Number - 7D3A7B555792

Vol.10(1), pp. 1-18 , January 2018
ISSN: 2141-6664

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Full Length Research Paper

Tax costs and tax compliance behaviour in Kenya

Farida Abdul
  • Farida Abdul
  • Strathmore School of Management and Commerce, Kenya.
  • Google Scholar
David Wang’ombe*
  • David Wang’ombe*
  • Strathmore School of Management and Commerce, Kenya.
  • Google Scholar

 Received: 03 October 2017  Accepted: 18 December 2017  Published: 31 January 2018

Copyright © 2018 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0

This study examines the influence of measures of tax compliance costs on tax compliance behaviour among medium and large corporate taxpayers in Kenya. It uses a Structural Equation Modelling (SEM) technique to establish the key cost drivers built using survey data, while controlling for key attributes of the tax system as well as firm characteristics. The results indicate that tax compliance in Kenya significantly declines with increase in tax compliance costs, particularly those related to understanding of the existing complex tax laws, changes in tax rules as well as general costs of meeting the compliance and regulatory requirements. The model constructs account for about 40% of variations in tax compliance behaviour in Kenya, which is above the empirically accepted minimum for exploratory studies. From the results, the study recommends a focus by tax authority and policymakers on measures to reduce these identified tax compliance costs. In addition, greater emphasis should be put on investing in opportunities that reduce financial pressure on firms thus encouraging tax compliance.

Key words: Tax costs, tax compliance behaviour, income tax, corporate taxpayers, Kenya.

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APA Abdul, F., & Wang’ombe, D. (2018). Tax costs and tax compliance behaviour in Kenya. Journal of Accounting and Taxation, 10(1), 1-18.
Chicago Farida Abdul and David Wang’ombe. "Tax costs and tax compliance behaviour in Kenya." Journal of Accounting and Taxation 10, no. 1 (2018): 1-18.
MLA Farida Abdul and David Wang’ombe. "Tax costs and tax compliance behaviour in Kenya." Journal of Accounting and Taxation 10.1 (2018): 1-18.

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