Relationship between Income Size, Inspection and VAT Compliance: Evidence from Private Firms in Kenya

Many developing nations in around the globe, Kenya included are struggling with the problem of tax non-compliance by the taxpayers. In Kenya, the problem of tax non compliance among business firms constrains the realization of revenue collection targets by Kenya Revenue Authority (KRA). This study aimed at investigating the relationship between the size of taxpayer’s income, inspection by the tax authorities, use of tax registers and VAT compliance. A sample of 233 registered firms was selected and data collected using self administered questionnaires to personnel in finance department of the selected firms. The data was analysed both descriptive and correlation analysis. The study revealed that VAT non compliance is high among the middle-income business firms and that Inspection of business firms by tax authorities had a slight positive relationship with VAT compliance (r =0.15, p<0.05) The study revealed that effective and regular use of Tax Registers had a significant positive relationship with VAT compliance (r = 0.622, p<0.05). The study recommends that stringent compliance measures and close monitoring should be observed among the mid-sized private firms. Tax authorities should also encourage effective use of tax registers through regular but impromptu inspections.Key words; Tax compliance, Value Added Tax, Keny

Determinants of Pension Schemes Governance Effectiveness: A Case of Kenya Medical Research Institute (KEMRI)

Retirement Funds Industry plays an important role in boosting economic growth and accelerating domestic savings in many countries. In Kenya, the retirement regulation body compliance based supervision in regulating the Pension industry. Despite this effort, there is a growing concern that some Schemes still experience serious credibility problems due to poor governance. This study sought to assess the determinants of effective pension schemes governance in Kenyan: A survey of KEMRI pension scheme was conducted where a sample of 50 respondents out of the population of 502 employees of the organization using purposive sampling technique. The study established that knowledge of the trustee‟s covenants by the members, information flow to members and participation of members in the governance of pension schemes are the main factors that influence effectiveness of governance of pension schemes. The KEMRI Pension Scheme Trustees‟ governance score card on their covenants was below average with 65.4% respondents giving it a poor rating. The study recommends that Trustees should establish a formal governance policy for decision making; enhancing information flow to members; and undertake an assessment of the skills and knowledge of Trustee. Keywords: Pension schemes, KEMR