The Effect of Stakeholders’ Engagement on Excise Duty Compliance Among Non-Alcoholic Beverages Dealers in Nakuru Town, Kenya

Abstract

Taxation, as administered by the Kenya Revenue Authority, has been a feature since the enactment of the Income Tax Act in 1973. Nevertheless, a significant number of taxpayers have not adhered to the Act, primarily due to the absence of robust government mechanisms to identify and integrate business owners into the tax system. Therefore, the purpose of this study was to determine the effect of stakeholders’ engagement on excise duty compliance among non-alcoholic beverages dealers in Nakuru town, Kenya. The study was anchored on the following theories: the Ability to Pay theory and the Theory of Planned Behavior. The target population was 185 non-alcoholic beverage dealers in Nakuru town. The response rate of 81.1% implies that 150 out of 185 questionnaires were responded to correctly filled out and submitted. This study relied on primary data, gathered using questionnaires distributed via a drop-and-pick method. The study found that stakeholder engagement positively influences excise duty compliance (β = 0.265, p-value = 0.001). The findings recommend that stakeholders’ engagement has a positive effect on excise duty compliance. Stakeholder engagement policies should be institutionalized, ensuring that non-alcoholic beverage dealers are actively involved in tax formulation and implementation processes.