Business , Economics & Management

Abstract

VAT compliance remains a critical concern among micro, small and medium enterprises (MSMEs) despite the expansion of digital tax administration in Kenya. This study examined the direct effects of three electronic tax invoicing attributes: technology readiness, technology usage, and quality of technology on VAT compliance intention among MSMEs in Nyeri Town. The study was anchored on the Theory of Planned Behaviour and Diffusion of Innovation Theory. An explanatory research design was adopted. The target population comprised 521 VAT-registered MSMEs, from which a proportionate stratified random sample of 226 firms was selected. Structured questionnaires were administered to business owners or personnel responsible for tax invoicing and VAT matters. A total of 171 usable questionnaires were returned, representing a response rate of 75.7%. Data were analyzed using descriptive statistics, correlation analysis and multiple regression. The direct regression model was statistically significant (R = 0.872, R² = 0.760, adjusted R² = 0.755; F = 175.864, p < 0.001), showing that the three electronic tax invoicing attributes jointly explained 76.0% of the variance in VAT compliance intention. Technology readiness (B = 0.295, p < 0.001), technology usage (B = 0.306, p < 0.001), and quality of technology (B = 0.421, p < 0.001) each had a positive and statistically significant direct effect. Quality of technology was the strongest predictor. The study concludes that adequate digital infrastructure, routine use of e-invoicing systems, and reliable, accurate and efficient platforms strengthen MSMEs' intention to comply with VAT obligations. It recommends reliable digital tax infrastructure, simplified and well-supported electronic invoicing processes, taxpayer sensitization, and MSME investment in compatible accounting systems and consistent digital record keeping.

Keywords

electronic tax invoicing; technology readiness; technology usage; quality of technology; VAT compliance intention; MSMEs.

Author Biographies

Yvonne Wanjiru Gitau - Moi University - Kenya - ywgitau@gmail.com

Peter Magero - Moi University - Kenya - ywgitau@gmail.com

Collins Kapkiyai - Moi University - Kenya - ywgitau@gmail.com

References

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