Abstract:
The purpose of this study was to examine and evaluate the internal control system in operation at Kenya
Revenue Authority with a view of knowing whether strengthening of internal controls can have any effect of
revenue collection and to answer the question “To what extent has internal controls enhanced revenue
collection in KRA? A descriptive survey design was used. The target population of the study consisted of 72
domestic taxes senior officers and 156 domestic taxes junior officers that were working at Kenya Revenue
Authority Mombasa Region. This study used questionnaires as the main tool for data collection. The
questionnaire content was checked to ensure completeness and accuracy. The researcher used the statistical
package for social sciences (SPSS) to analyze the data. The statistical method of Pearson Product of
Correlation Coefficient was used to analyze relationship between various variables. The results indicated that
internal controls had a positive significant effect on revenue collection. For all the items, the critical values
were significant at p < 0.05 level of significance. This indicated the acceptance of the research hypotheses,
namely; control environment, risk assessment, control activities, and information and communication have a
positive significant effect on revenue collection. The test statistic results were as follows: control environment
and revenue collection (r = 0.412, p = 0.000 < 0.05), risk assessment and revenue collection (r=0.398,
p=0.002<0.05), control activities and revenue collection (r = 0.451, p = 0.001 < 0.05) and information,
communication and revenue collection (r = 0.471, p = 0.000< 0.05). Based on the results in the study, the
researcher recommended that: the various policy managers, the top management and other stakeholders
should establish and maintain an enabling control environment; KRA together with other partner agencies
should come up with strong partnerships in assessing the various risks that could affect revenue collection
negatively and should also ensure that the various risks are managed at any given level of operations
effectively and efficiently; The KRA managers and strategists should ensure that all the control activities are
identified, strategically positioned and implemented across all the departments in order to achieve improved
revenue collection; and there should be well established information and communication platforms since
internal controls are a good practice for avoiding information asymmetry but for revenue collection (there
should be a proper tax base upon which projections are founded on information sharing/flow and proper
communication). This facilitated with a revenue enhancement strategy definitely lead to maximisation of
revenue collection.