Abstract: The main issue faced by all tax authorities is that it has never been easy to persuade all taxpayers to comply with the regulations of a tax system. Real estate sector is one of the fastest growing sectors of the economy in Kenya yet taxes collected from this sector have continually been on decline for the last five years. The study specifically sought to determine the effect of tax compliance cost, tax education and knowledge, fines and penalties and perceived opportunity for tax evasion on tax compliance in the Real Estate sector. The study was be guided by Theory of Planned Behavior. A sample size of 80 was drawn from the target population of 800 real estate investors. The study employed qualitative and quantitative form of data collection. Data was collected using structured questionnaire, coded, keyed and analyzed quantitatively using both descriptive and inferential statistics. The study finding showed that compliance cost has the negative effect on level of tax compliance. However, tax knowledge and education has positive effect on level of tax compliance among real estate investors. Similarly, fines/penalties have positive effect on level of tax compliances, while perceived opportunity for tax evasion has negative effect. The study provides some preliminary evidence that imposing fines/penalties and provision of tax knowledge and education among real estate investors improved tax compliance. Conversely, high compliances cost and high opportunity for tax evasion reduced tax compliance among real estate investors. Thus, tax compliance cost should be in a way that does not encourage taxpayers to evade tax. There should be stiff enforcement of fines and penalties to deter tax evasion. Additionally, tax authorities should simplify processes involved in filling of returns and payment of taxes.
Keywords: Real estate sector, tax authorities, real estate investors.
Title: An Analysis of Factors Affecting Tax Compliance in the Real Estate Sector: A Case Study of Real Estate Owners in Mombasa County, Kenya
Author: NAMASAMBU SIMIYU, HEZEKIAH MWAKALE
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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