The Effect of Dispute Resolution Reform on Rental Income Tax Compliance Among Residential Landlords in Ruaka Town, Kiambu County, Kenya

Abstract

Rental income tax compliance is important as it has a direct impact on revenue for most governments around the world. The Kenya Revenue Authority has, of late, failed to meet its revenue targets, particularly rental income tax targets. The purpose of the study was to determine the effect of dispute resolution reform on rental income tax compliance among residential landlords in Ruaka Town, Kiambu County, Kenya. The theory that guided this study was Procedural Justice Theory. An explanatory research design was adopted. The target population was 2103 residential landlords in Ruaka Town, Kiambu County, and a sample size of 336 respondents was calculated using the Yamane formula. Primary data was collected using a structured questionnaire. A pilot study was done to test the validity and reliability of the research instrument. Both descriptive statistics and inferential statistics were carried out with the help of the SPSS software. Inferential statistics such as Pearson correlation and multiple regression analysis were used to test the relationship between the study's dependent variable and the independent variables. The beta coefficient results revealed that Dispute resolution reform had a positive and significant effect on rental income tax compliance (β = 0.099, p = .020). The significant positive effect of dispute resolution reform suggests that the government should strengthen tax dispute mechanisms by ensuring fairness, transparency, and accessibility in conflict resolution processes. Future researchers could investigate the effects of attitude and perception, which are behavioral factors that might be analyzed to find their relative effect on the taxpayers in compliance with the rental income tax.