Abstract:
Tax revenue is the backbone of all governments' revenues in the world. Studies point
to the possibility that taxpayer education impacts the understanding of the tax laws, tax
procedures, and tax filing, among others. However, there is a lack of taxpayer's
education attribution to a particular tax base in the overall revenue performance. The
study's objectives were to investigate the effect of taxpayer sensitization, the effect of
print media education, and the effect of electronic media taxpayer education on income
tax performance among micro-enterprises in Nairobi County, Kenya. The study is
significant because KRA could use the findings to improve its taxpayer outreach
interventions by understanding what works best among the micro-enterprises. The
study was anchored on transformative learning, social learning, and the benefit theories
of taxation. The target population of the study was 7,800 micro enterprises in the
Kamkunji area. Bridget and Lewin's formula was used to arrive at a sample of 380
micro-enterprises, and a systematic sampling technic employed to reach the sampled
population. Primary data was collected using a self-administered five-point Likert scale
questionnaire. Findings indicated that Taxpayer sensitization was significant on income
tax performance with (β=0.274, p=0.000; ρ < 0.05), print media education was
significant on income tax performance with (β= 0.324; p=0.004; ρ < 0.05) and
electronic media education was significant on income tax performance with (β=0.321;
p=0.001; ρ < 0.05). Pearson correlation tested at a 95% confidence level showed a
positive correlation of R 0.397, 0.283, and 0.421 between taxpayer sensitization, print
media education, electronic media education, and tax performance. The findings
revealed that taxpayer sensitization, print media education, and electronic media
education correlate with income tax performance up to R=0.887 and account for R 2
=0.786. The findings further revealed that even if the results were adjusted, the study
still accounted for Adjusted R 2 0.779 variation of income tax performance. The
Regression equation showed that the independent and dependent variables were
statistically significant. A unit change in taxpayer sensitization, print media education,
and electronic media education increased income tax performance by 0.274, 0.324, and
0.321, respectively. The study concluded that taxpayer sensitization, print media
education, and electronic media taxpayer education affected income tax performance.
The study recommends that revenue authorities encourage taxpayers to attend
taxpayers' week organized for business entities in which they present and represent
other businesses' tax needs. This would lead to an increased level of awareness which
is critical for improved income tax performance. Since the study found variations in the
relationship between taxpayer education and income tax performance, future studies
might be conducted in the areas that caused the variation, including economic, social,
and religious factors.