Effect of Taxpayer Patriotism on Turnover Tax Compliance Among Small and Medium Enterprises in Ruiru, Kiambu County, Kenya

Abstract

Turnover tax is important in helping to bring more taxpayers into the tax bracket, hence increasing the country’s revenue collection. This applies to several businesses, including those in the small and medium enterprises subsector. However, a number of factors hamper turnover tax compliance by both individuals and companies. The main objective of the study was to determine the effect of taxpayer patriotism on turnover tax compliance among small and medium enterprises in Ruiru, Kiambu County, Kenya. The study was anchored on the Theory of Reasoned Action and Expected Utility Theory. The study adopted an explanatory research design and the target population was 2,549 small and medium enterprises in Ruiru town and with a sample size of 345 respondents. After collection and analysis of the responses, 279 respondents correctly filled and submitted their questionnaires, indicating 80.9% response rate. Primary data collection was conducted using closed-ended questions. The data was analyzed using descriptive statistics and linear regression analysis. The study found that taxpayer patriotism has a positive and significant effect on turnover tax compliance (β = 0.401, p = 0.021). The study recommends that, given the positive effect of taxpayer patriotism, policymakers should integrate civic education programs that emphasize the role of taxation in national development to strengthen tax morale. Further studies could also explore the role of automation to assess its impact on turnover tax compliance efficiency.