An Examination of the Rate of Compliance with Property Taxation in Nyandarua County, Kenya

Abstract

Tax in Kenya has been considered a very complex subject since the times of colonialism. Forced payment of taxes during the colonial period made Kenyans greatly oppose colonial rule. Taxation was one of the major reasons for the struggle for independence in Kenya. In the new constitution of Kenya 2010, Kenya adopted a devolved form of government with 47 counties. Each county requires revenue. Article 209 of the constitution mandates county governments to levy taxes on property owned by Kenyans, especially land. Nyandarua County government tax system design and property owners' perception of paying property tax has proved to be difficult to collect revenue. Tax evasion is very common in Nyandarua County. Nyandarua County government endeavors to raise the levels of revenue collected, but the greatest impediment is property tax evasion. This makes the county government constantly fail to raise targeted revenue. Kenya National Bureau of Statistics (2014) ranked Nyandarua County at position 34 out of 47 counties in revenue collection efficiency in Kenya. Therefore, this study seeks to examine the compliance rate with property taxation in Nyandarua County.

The study adopted a mixed methods research design to investigate compliance with property taxation in Nyandarua County. The study used purposive and Krejcie and Morgan's (1970) Table for Determining Sample Size to sample out respondents. The researcher sampled 375 property owners, 15 revenue officers and 10 policymakers. To acquire primary data, the researcher interviewed policymakers, revenue officers and Nyandarua County's chief accountant and a focus group discussion was done with property owners. Secondary data were obtained from published books, scholarly works and papers. Data were analyzed both qualitatively and quantitatively. The researcher found out that rate of compliance is low at 28.75%.