Effect of excisable goods management system on excise tax revenue collection in the coast region of Kenya.

Abstract

The Coast Region has estimated that KRA loses 4.7 litres for every five-litre bottle to the unscrupulous dealers, excise stamps are swapped. It was in the background of this statement that researcher sought to establish the effect of the excisable goods management system on the excise tax revenue collection in the Coast Region. The specific objectives of the study was to determine the effect of product marking, tracking and tracing, and product authenticity on excise tax revenue collection in the Coast Region. To provide the basis of the study, the theory of reasoned action, technological determinism theory and dynamic capabilities theories was be used. The research used explanatory research design. Data collected was primary data sources using structured questionnaires. The target population of the study consisted of 838 participants involved with the EGMS. The sample size of 271 participants was determined using a scientific formula based on stratified and random sampling technique. The study employed descriptive and inferential statistics for data analysis. The hypotheses were tested using multiple linear regression models. The results revealed that Product Marking (β 1 =0.127, p<0.05), excisable goods tracing and tracking (β2=0.218, p<0.05) and Product authenticity (β 3 =0.173, p<0.05) significantly and positively influence excise tax collection. The study concluded that product marking, tracing and tracking, and product authenticity matters in excise revenue collection in the Coast region. The implication to policy formulation is that there is need to improve on product marking by ensuring that they work in collaboration with manufacturers of these products on the adoption of latest tracking gadgets that cannot be easily tampered with. This will prevent the tax evasion by the various manufacturers especially bottling companies in the region. The research suggested that future studies be conducted through longitudinal studies to determine the success of the system on revenue collection over time.The analysis indicated that independent variables could only explain 84% of the revenue collection on the excisable goods, which implied there were additional factors which could explain revenue collection; hence future studies should identify these factors.