Effect of strategic change implementation on revenue collection by customs service department of Kenya Revenue Authority

Abstract

Revenue collection is a management system that measure revenue. The process can be used to identify factors that drive revenue, measure the performance of these factors, and take action to maximize revenue. ICT adoption, customer relationship management, one stop boarder post operations and Staff Training can effectively be used for revenue collection. Despite the fact that KRA has put in place measures in its customs department to improve on Revenue collection, it has continued to post shortfall in revenue collection. The purpose of this study was to establish the effect of strategic change implementation on Revenue collection by Customs Service Department of KRA. The study narrowed its research undertakings into four major specific objectives which are: to establish the effect of ICT adoption on Revenue collection by Customs Service Department of KRA; to establish the effect of CRM on Revenue collection by Customs Service Department of KRA, to establish the effect of one stop border post on Revenue collection by Customs Service Department of KRA and to establish the effect of Staff Training on Revenue collection by Customs Service Department of KRA. The study employed Rational Expectations Theory of Technology Adoption, Optimal Tax Theory, Theory of Equal Sacrifice and Institutional Theory. The study area was Customs Service Department of KRA. The target population was 547 and sample size was 231 respondents. The researcher used stratified random sampling technique to sample staff from customs department Mombasa and senior staff in the organization. The findings indicated that that ICT adoption has a positive and significant influence on revenue performance (β1=0.125, p=0.011). It was also established that customer relationship management has a positive and significant influence on revenue performance (β2=0. 262, p=0.001). It was further established that one stop boarder post has a positive and significant influence on revenue performance (β3=0.148, p=0.044). Finally, staff training was found to have a positive and significant influence on revenue performance (β4=0. 166, p=0.018). The results also showed R square of 0. 255, which indicated that the independent variables explain 25.5% of variations in the dependent variable (Revenue collection). The study infers that strategic change implementation has influenced Revenue collection by Customs Service Department of KRA. In particular, ICT adoption, CRM and staff training were found to have influence on Revenue collection by Customs Service Department of KRA. CRM had the greatest influence on revenue collection, followed by ICT adoption, then staff training and lastly OSBP operations. The impliaction of the findings is that CRM, ICT adoption and staff training are critical in influencing revenue colelction by Customs Service Department of KRA. The study recommends that Kenya Revenue Authority should come up with a clear ICT policy aimed at improving revenue collection. Kenya Revenue Authority should come up with a clear policy on customer service. KRA should come up with a policy to make one stop boarder post operations more effective. KRA should come up with a policy that makes Staff Training more frequent on emerging issues on revenue collection.