Description
ABSTRACT
Ineffective tax audit has been considered as one of the many reasons behind non-compliance to tax laws and revenue loss. The audit of taxpayers plays an important role in the administration of tax laws.The study examined the effect of staff capacity, tax dispute resolution mechanism on tax audit effectiveness in Kenya Revenue Authority-South rift valley region. The study was premised on the Optimal Theory of Taxation and Hoffman’s Tax Planning Theory. The study used descriptive research design targeting a population of 80 respondents, consisting of tax officers in South Rift Valley Region; therefore, it adopted a census method. Pre tested questionnaires were used to collect data. Data was analyzed using descriptive statistics and inferential statistics. The findings revealed that tax audit staff capacity (β = 0.136, p < 0.05) is directly related to tax audit effectiveness in South Rift Valley Region. However, the tax disputes resolution mechanisms (β = -0.009, p ˃ 0.05) is inversely related to tax audit effectiveness in the area as per the joint regression model.There is also need for KRA to organize regular training for all its staffs to enable them be more competent in their work. The study also recommends that additional policy interventions be made on the tax dispute resolution mechanisms so as to enable the expedition of tax disputes and prevent accrual of dues and unresolved disputes.
Key words: Tax audit, Tax officer
