Determinants of Voluntary Rental Income Tax Compliance by Landlords in Kiambu Town, Kenya

Abstract

The purpose of this study was to establish the determinants of voluntary rental income tax compliance by landlords in Kiambu County, Kenya; case of Kiambu Town. The study employed descriptive survey design. A sample size of 265 rental property owners chosen.  Primary data was collected using a questionnaire. Data analysis involved descriptive and inferential statistics. Descriptive statistics included the mean scores, standard deviation and frequencies while inferential statistics included multiple linear regression model. The study revealed that tax knowledge, attitude and perception, cost of compliance and tax rate levied on rental property explained 70.1% of the voluntary rental income tax compliance by landlords in Kiambu town. Regression of coefficients indicated that tax knowledge has a positive and significant effect on voluntary rental income tax compliance, attitude and perception has a positive and significant effect on voluntary rental income tax compliance, cost of compliance has a negative and significant effect on voluntary rental income tax compliance while tax rate levied on rental property has a negative and significant effect on voluntary rental income tax compliance. The study thus concludes that tax knowledge is important in enhancing rental tax compliance. A conclusion is thus made that the nature of attitude and perception about tax by landlords may influence their level of rental income tax compliance. The study recommends for the need for periodic workshop training, tax educational programmes organized by the Kiambu county governments and Kenya Revenue Authority to sensitize and about the importance of taxa compliance.

Keywords: Rental Income, Tax Compliance, Voluntary