Abstract:
Tax Compliance concerns are as old as taxes themselves and will remain an area of discovery
as long as taxes exist. Compliance refers to fulfilling all tax obligations as required by the tax
laws. There has been no charging of taxes proportionately among small and medium enterprises
(SMEs) internationally. High compliance costs, inadequate understanding, high tax rates and
tax penalties are some of the variables that can lead to tax evasion and tax fraud. KRA has not
been able to meet it’s set revenue target set by the National treasury. This trend clearly shows
that there is a need for the government and the tax authority to review its efforts to foster
compliance among the taxpayers to be able to meet its revenue targets. The key aim of the
current study is to investigate the effect of taxpayer education on tax compliance among Small
and Medium Enterprises in Ekerenyo, Nyamira County . The specific objectives were to
evaluate effect of Face-to-Face Taxpayer Education, electronic tax education, Taxpayer
sensitization and print media taxpayer education on value added tax compliance. The study is
anchored on the theory of the fishers Model, economic deterrence theory, theory of reasoned
action and social influence theory. The study adopted explanatory research design. The target
population for this study consisted of all 326 licensed SMEs operating along Ekerenyo,
Nyamira County.” A sample size of 180 was drawn from this population using Yamane’s
formula. The study used primary data, collected through questionnaires administered through
drop and pick later method. The data collected was analyzed using both descriptive and
inferential statistics. A Multiple linear regression model was used to establish the strength of
the relationship between independent and dependent study variables. The results indicated that
Face-to-Face Taxpayer Education, electronic tax education, Taxpayer sensitization and print
media taxpayer education is significant with an unstandardized beta coefficient = 0.280, p =
0.000; = 0.387, p = 0.000; = 0.225, p = 0.000; and = 0.295, p = 0.001. The study concluded
that there was significant effect of Face-to-Face Taxpayer Education, electronic tax education,
Taxpayer sensitization and print media taxpayer education on value added tax compliance. The
study recommends that social and religious institutions be engaged in taxpayer education to
improve the consumption of the printed materials for knowledge gain and tax compliance.
Therefore, Future studies may be conducted on other subsets of enterprises forming sectors of
the economy to form basis of comparison in Value Added Tax performance.
