Journal of
Accounting and Taxation

  • Abbreviation: J. Account. Taxation
  • Language: English
  • ISSN: 2141-6664
  • DOI: 10.5897/JAT
  • Start Year: 2009
  • Published Articles: 209

Full Length Research Paper

Tax costs and tax compliance behaviour in Kenya

Farida Abdul
  • Farida Abdul
  • Strathmore School of Management and Commerce, Kenya.
  • Google Scholar
David Wang’ombe*
  • David Wang’ombe*
  • Strathmore School of Management and Commerce, Kenya.
  • Google Scholar

  •  Received: 03 October 2017
  •  Accepted: 18 December 2017
  •  Published: 31 January 2018


This study examines the influence of measures of tax compliance costs on tax compliance behaviour among medium and large corporate taxpayers in Kenya. It uses a Structural Equation Modelling (SEM) technique to establish the key cost drivers built using survey data, while controlling for key attributes of the tax system as well as firm characteristics. The results indicate that tax compliance in Kenya significantly declines with increase in tax compliance costs, particularly those related to understanding of the existing complex tax laws, changes in tax rules as well as general costs of meeting the compliance and regulatory requirements. The model constructs account for about 40% of variations in tax compliance behaviour in Kenya, which is above the empirically accepted minimum for exploratory studies. From the results, the study recommends a focus by tax authority and policymakers on measures to reduce these identified tax compliance costs. In addition, greater emphasis should be put on investing in opportunities that reduce financial pressure on firms thus encouraging tax compliance.

Key words: Tax costs, tax compliance behaviour, income tax, corporate taxpayers, Kenya.