Technology acceptance and tax compliance among Hotels in Taita Taveta County, Kenya

Abstract

Tax is the main source of Government revenue accounting for over 80% of the total revenue. Due to this, the Kenya revenue authority has over time tried to ensure total tax compliance by coming up with new technological systems moving from integrated tax management system in 2014 to the current i-tax system for tax registration, filing of tax returns and payment of tax due by tax payers. Even with the advancement in technology and making e-filing compulsory, the Kenya Revenue Authority is yet to achieve full tax compliance. This is manifest in failure by the Kenya Revenue Authority to meet its targets by an average of 10% between year 2014 to year 2018. This study was conducted to establish the relationship between technology acceptance and tax compliance for hotel sector in Taita Taveta County. The specific objectives of the study were to establish relationship between Perceived ease of use and tax compliance for hotel sector in Taita Taveta County, to establish relationship between perceived usefulness and tax compliance for hotel sector in Taita Taveta County and to establish relationship between perceived risk of use and tax compliance for hotel sector in Taita Taveta County. The study was guided by the following four theories: deterrence theory, behavioral theory, theory of technology acceptance and diffusion of innovations theory. The study targeted hotel managers and adopted explanatory research design. A pilot study was conducted in Kinango Sub-county of Kwale County to test the validity and reliability of research instruments that were used for the study. The study collected primary data from a sample of 71 hotel managers selected through simple random sampling from a population of 240 hotels. Data was tested for validity and reliability and analyzed using descriptive and inferential statistics. The adjusted R 2 of the regression model was 0.598. The findings indicated that perceived usefulness had a positive and significant relationship with tax compliance (β=1.175, p=0.000). Perceived ease of use had a positive and significant relationship with tax compliance (β=0.432, p=0.027). Perceived risk of use had a negative and significant relationship with tax compliance (β= -0.915, p=0.000). The study concluded that there was a significant relationship between technology acceptance and tax compliance. Based on the findings, the study recommended that management of the hotels in Taita Taveta should educate their employees on the importance and usefulness of using technology. They should create an environment that allows employees to accept technology such as investing in the best information technology infrastructure. The management should also invest in training their employees on information technology skills. This will make it easy for employees to adopt and use tax information technology systems. Further, the management should find ways of eliminating possible risks associated with use of technology including financial risks, privacy risk and performance risk. The government should also put measures and policies in place that protect users of electronic tax systems such as i- tax.