Tax Compliance of Small and Medium Enterprises in Njeru Municipal Council
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Small and Medium enterprises are fast growing and spread across all sectors. The study’s purpose was majorly to analyze the state of tax compliance of Small and Medium enterprises in Njeru Municipal council using a qualitative approach. Specific objectives of the study included establishing the level of tax administration costs incurred by the tax administration to combat tax non-compliance by Small and Medium enterprises, examining factors that impact on tax administration of Small and Medium enterprises, designing a framework to improve tax administration of Small and Medium enterprises. The study used a descriptive research design. A sample size of 47 was drawn from the target population of 49 members of staff of Njeru Municipal council. Data was collected using an interview guide. The data was also coded, analysis was done using content analysis and narrative analysis. The data was then summarized in form of tables and charts. The findings revealed tax administration costs such as agency costs and suggested strategies to enhance tax administration such as construction of modern markets to enhance tax compliance of SMEs. The findings of this study will aid Njeru Municipal Council in coming up with policies to foster compliance among SMEs and thereby translating to improved revenue collection. The study recommends enhanced training and sensitization of the tax administration to improve tax compliance and enhance online technology for an overall positive impact on tax compliance of SMEs.