Effect Of Taxpayers Knowledge And Tax Rates On Tax Compliance Amongst Smes In Nakuru County Kenya

Purpose: The study aimed at determining effect of taxpayer's knowledge and tax rates on tax compliance amongst SMEs in Nakuru County Kenya. Methods: The study employed descriptive research design. The data collection was done by asking the target representative population structured and pre - determined questions. The target population of the study comprised of Small and medium Enterprises in Nakuru County which were 1,425 SMEs operating within the township, concentrating within the manufacturing, trade and services sectors. The study adopted stratified random sampling technique to select 10% of the target population therefore giving a sample size of 142 respondents. The researcher utilized questionnaire as the essential instrument for information gathering. Data gathered from correctly filled questionnaires were coded, tabulated and analyzed using SPSS version 22 by both descriptive statistics which include mean and standard deviation to capture the characteristics of the variables under study. Inferential statistics were also used to analyze the relationship of the dependent and the independent variable. The results were then presented through Figures and Tables. Results: Regression results revealed that tax payers knowledge, tax rates had positive and significant effect tax compliance amongst SMEs in Nakuru County Kenya. This means that an increase in tax payers knowledge and tax rates led to an improvement in tax compliance. Unique contribution to theory, practice and policy: The study recommended tax payers learning ought to be emphasized since tax data, tax learning tends to advance tax compliance than tax organization. In addition the study also recommend that tax rates should be reduced since expansion in tax rates prompts higher development, appropriation and offering costs which prompt higher costs and accordingly customers change their purchasing conduct