dc.description.abstract |
Tax revenues are a critical component of government resources in almost all economies
as they support the role of government in providing public services, re-distribution of
income, and implementing other fiscal policy concerns. However, tax revenue
performance often faces challenges that deny many governments the ability to meet
their economic growth and development ambitions. Some of these challenges are
internal and while others emanate from the taxpayers. The study attempted to determine
the effect of ad valorem tax valuation on secondhand motor vehicle dealers in Nairobi
County. The specific objective of the study was to determine the effect of tax rates, the
effect of the system of valuation, and the effect of policies and regulations on revenue
performance. The study was anchored on the Laffer Curve theory, the technology
acceptance model theory, and the theory of planned behavior. The study adopted an
explanatory research design. The study targeted a population of 3055 employees of the
department of customs and border control of the Kenya Revenue Authority segmented
into various levels. A sample of 354 was drawn from the population using the Bridget
and Lewin formula and the respondents' response rate of 72% was obtained. A
questionnaire was used to collect primary data and analysis included both descriptive
and inferential statistics. The study adopted Multiple Regression model for its
inferential analyses. Descriptive statistics were presented in tables while correlation and
regression analysis were used for inferential statistics. The findings of the study
indicated that tax rates, system of valuation, and policies and regulations had positive
and significant effect on revenue performance. These results were evidenced by the
standardized beta values of 0.179 for tax rates, of 0.440 for system of valuation, and of
0. 308 for policies and regulations. A unit change in tax rates increased revenue performance by 0.179. A unit change in the system of valuation increased revenue
performance by 0.440. A unit change in policies and regulation increased revenue
performance by 0.308. Further, the findings of the study revealed that the correlation
coefficient of R was 0.697 and the R square was 0.486. The model revealed an R
squared of 0.486 where the factors under the study, contributed to 48.6% of the revenue
performance while the remaining 51.4% can be explained by other factors which were
not part of this study. These factors could include but not limited to demographic,
cultural, economic and other externalities. Based on the findings of the study, it was
concluded that tax rates, system of valuation, and policies and regulations influenced
revenue performance. The study, thus, recommended that Kenya Revenue Authority,
and the government should put in place concrete policies & regulatory frameworks that
are favorable to Kenyan motor vehicle dealers. This is to work in harmony with the
effects of regional and community blocks import barriers and that affect the importation
and sale of motor vehicles. The study suggests the need for more studies focusing on
other factors determining revenue performance not included in the study such as
cultural, economic, social and other externalities across other properties valuations in
Kenya. |
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