Browsing by Author "Were, Monica"

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    An assessment of informal sector income tax as a means of enhancing public value : Lessons from Kenya Revenue Authority
    (Stellenbosch : Stellenbosch University, 2020-12) Were, Monica; Burger, A. P. Johan
    ENGLISH SUMMARY : The vitality and growth of small to medium-size enterprises together with advancements of the Kenyan economy shows the need for government to respond appropriately in terms of revenue generation. The response should redistribute the tax burden to all stakeholders within the economy. This is because revenue or tax is used not only to fund education and health, which are key pillars for the promotion of public value in both the short and the long term, but also helps in supporting the growth of the local economy through development of infrastructure that supports the local business networks and cash transfers and subsidies which help induce supply and demand in local markets. Tax administration and policy should be among the biggest concerns for any economy looking to attaining public value for its citizens. Every country desires to have a tax administration instrument that is efficient in collecting taxes and a tax payer base that is fully compliant. This paper presents an analysis of imperatives and theories concerning the Informal sector with regard to revenue collection in Kenya. The aim is to determine the potential benefit of informal sector tax revenue collection by government for the public value of the citizens in Kenya and, in addition, to show the effect of informal sector income tax on public value if this is should be achieved by the Kenya Revenue Authority. The paper presents a comparative analysis of researched techniques to explore techniques that the government can use for collecting income tax from the informal sector in Kenya. It also highlights the current income tax system used by the Kenya Revenue Authority in the quest to collect income tax. It shall draw from secondary data findings and through analysis that Kenya needs to re-examine its tax administration and policy if it is going to make progress in increasing revenue generation from the informal sector as a tool to enhance public value. Tax compliance in the informal sector is an outcome of a cost-benefit decision. The choice of whether or not they pay taxes is thus driven by a simple-cost benefit analysis. Therefore, success of informal sector tax system is based on the efficiency of fiscal administration coupled with technological, economic, social and political incentives.