Effect of adoption of electronic cargo tracking system on excise revenue collection in Kenya: a case of Jomo Kenyatta International Airport

Abstract

Over the years, Kenya Revenue Authority has implemented reforms and modernization programs geared towards positioning it as an efficient modern tax administrator. Despite the positive developments, KRA has continued to miss revenue targets partly attributed to taxpayer’s noncompliance and inefficiencies in revenue management systems. To mitigate lack of adequate revenues, Ministry of Finance has continuously revised up its fiscal deficit on a number of occasions. Electronic is a modern computer-based assessment system that was introduced by the Kenya Revenue Authority Customs department, to monitor cargo and improve revenue collection. The study aimed to determine the effect of adoption of electronic cargo tracking system (ECTS) on excise revenue collection in Kenya - a case of Jomo Kenyatta International Airport (JKIA) as an entry and exit point. The study was guided by the following specific objectives; to determine how cargo monitoring affects excise revenue collection at JKIA in Kenya; to investigate whether Information Sharing affects excise revenue collection at JKIA in Kenya; to establish if cargo Security has effectively contributed to excise revenue collection at JKIA in Kenya. The study adopted explanatory research design. The target population comprised of 300 Customs and technical staff of Kenya Revenue Authority stationed at JKIA Customs department. Stratified random sampling was used to identify the population which was Customs and technical officers assigned to ECTS. Modern portfolio theory, Diffusion of innovation theory, Technological determinism theory, Infusion theory of technology and Technological acceptance model are the theoretical frameworks that guided the study. The study employed primary data collection by closed ended structured questionnaire using five-point Likert scale. The findings of the Multiple regression analysis revealed that Cargo Monitoring positively and significantly influenced Excise Revenue Collection (β 1 =0.221, p=0.003): Cargo Security positively and significantly influenced Excise Revenue Collection (β 2 =0.334, p=0.000); Information Sharing positively and significantly influenced Excise Revenue Collection (β 2 =0.357, p=0.000). Therefore, the study concluded that adoption of Electronic Cargo Tracking System (ECTS) has had significant effect on Excise Revenue Collection in Kenya, as shown by the increase in excise revenue from Sh. 80 billion in 2010 to 165 billion in 2018. From the results, the study recommends that Kenya Revenue Authority should fully strengthen Cargo Monitoring, Cargo Security and Information Sharing in order to realize additional Excise Revenue Collection at JKIA. The study suggests that future research can evaluate other factors that affect Excise Revenue Collection at JKIA.