Effects of Infrastructural Development on Tax Revenue Performance in Kenya

Authors : Dr. Rutto Reuben

Volume/Issue : Volume 5 - 2020, Issue 11 - November

Google Scholar : http://bitly.ws/9nMw

Scribd : https://bit.ly/2Vpr6Up

Kenya Revenue Authority (KRA) collects more than 95 % of all government revenue. Through taxation, govern t is able to raise revenue that is sufficient for public spending without too much borrowing. Tax is a compulsory payment imposed by the government on the incomes and profits of individuals and corporate bodies. Taxation is the central government main source of revenue income. The amount of tax revenue realized or expected by any state is determined and influenced by various economic factors. The factors range from micro to macro-economic. In Kenya, revenues from taxes have, for quite some time, remained low relative to the effort and tax policies in place. The Kenya government has always been in search for the appropriate policy strategy to enhance tax revenues boost its revenue profile. This study sought to find out the effect of infrastructural Development Index (INFDI) on tax revenue performance in Kenya. The study used annual time series secondary data for the period 2003-2018, estimate a linear model of revenue performance and the selected macro -economic factor. The data was source from the Central Bank of Kenya, Kenya National Bureau Statistics (KNBS), Ministry of Finance data on National Budgets and other Government records. The study used correlation and regression analysis research design. The findings established that INFDl had a positive relationship with tax revenue collected. The value which is used to show to what percent do the explanatory variables explain the dependent variable was found to be 0.7697 while the p values for all variables were found to be significant at 5% level of confidence. The findings will inform the government on what areas to invest its resources in order to boost and improve tax revenue performance

Keywords : Tax Revenue Performance, Infrastructure Development Index.


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