Role of Electronic Tax Invoice Management Systems in Enhancing Tax Compliance Among Small and Medium Enterprises in Nairobi City County, Kenya (International Academic Journal of Economic and Financial Research)

Summary

• Data gathered from 215 valid questionnaires administered to SME respondents were analyzed to assess tax compliance determinants in Nairobi City County.p.2
• SMEs contribute close to 80% of Kenya's national economy, yet tax compliance remains a persistent challenge.p.4
• According to the Kenya Revenue Authority, less than 30% of registered SMEs in Nairobi City County are active taxpayers.p.4
• The study targeted a population of 33,701 active SMEs registered with the Nairobi County government in the Central Business District.p.8
• The direct effects regression model of electronic tax systems recorded an R² value of 0.642, explaining 64.2% of the variation in tax compliance.p.10

Key insights

1. More than 60% of registered SMEs in Nairobi City County do not file tax returns, leading to fines and disqualification from government support.p.4
2. Timely payment of taxes among SMEs scored a relatively low mean of 3.337, indicating ongoing lapses in tax adherence.p.10