Authors: Michael M. Gichuki1, Martin Oleche2 and Cliff Ooga Obwogi3
1&3National Defence University-Kenya,
- P.O. Box 24381- 00502, NAIROBI, KENYA
Co. Author Email: mugendigm@gmail.com
2The University of Nairobi,
P.O. Box 30197-00100, Nairobi, Kenya
Email: moleche@uonbi.ac.ke
ABSTRACT: The research in this paper seeks to understand the effects of Business Intelligence (BI) on tax compliance in Kenya, particularly looking at how data analysis can help in changing the behaviour of tax payers and thus enhancing on tax laws. The first severance objective is to know if BI increases tax compliance since it improves the decision-making process towards the enforcement of the laws. The study employed cross-sectional survey design to obtain data from a population of 100 employees of the Kenya Revenue Authority (KRA) and 76 individual and corporate tax payers from four Tax Service Offices (TSOs) in Nairobi. Stratified random sampling and purposive sampling approaches were used in order to select the respondents. The methodology of data gathering in this study comprised structured questionnaires/ad hoc interviews and the analysis of the data was done by the use of frequency tables, percentage distribution as well as regression analysis to determine the relationship between the independent variable (BI) and the dependent variable (Tax compliance). The paper presents the evidence of BI’s statistically significant positive relationship with tax compliance where BI appears to have a strong influence in identifying tax evasion cases and enhance enforcement decisions. Conversely, an array of studies showed that higher tax rates and compliance costs have a direct, negative relationship with compliance suggesting that these financial pressures may result in noncompliance from taxpayers. As such, these results call for the use of BI in enhancing compliance initiatives while reinforcing the significance of careful examination of the relationship between tax rates and compliance cost. Therefore, the study would like to suggest to the policymakers and tax authorities to invest more in BI systems to improve compliance where the high tax rates and complicated compliance procedures pose the challenges.
Keywords: Business Intelligence, tax compliance, Kenya Revenue Authority, data analytics, compliance costs
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Suggested Citation
Gichuki, M. M., Oleche, M. and Obwogi, C.O (2024). The Impact Of Business Intelligence On Enhancing Tax Compliance In Kenya: A Comprehensive Analysis. African Research Journal of Education and Social Sciences, 11(2), 85-97. Available online at http://arjess.org/social-sciences-research/the-impact-of-business-intelligence-on-enhancing-tax-compliance-in-kenya-a-comprehensive-analysis.pdf
