Tax Reforms and Compliance among Small and Medium Enterprises in Bungoma County, Kenya

This study critically examined the conceptual and theoretical frameworks underpinning tax reforms and their influence on tax compliance among Small and Medium Enterprises (SMEs) in Bungoma County, Kenya. SMEs are vital to economic development through employment creation, innovation, and contributions to government revenue; however, tax compliance among SMEs remains low, particularly in rural areas. A systematic literature review was conducted using peer-reviewed journals, government reports, and policy documents published between 2018 and 2025. The study adopted Economic Deterrence Theory, Institutional Theory, and the Slippery Slope Framework to analyze how enforcement mechanisms, institutional trust, and policy reforms affect SME compliance. Data extraction focused on technological, administrative, policy, and educational reforms affecting SMEs in Bungoma County. Findings indicate that technological reforms enhance efficiency in tax administration but are constrained by poor digital infrastructure and low digital literacy among SME owners. Policy reforms simplify compliance processes and promote voluntary adherence, while administrative reforms improve transparency and accountability. Educational reforms strengthen taxpayer knowledge, recordkeeping, and overall compliance. The study concludes that tax reforms significantly influence SME compliance, but their effectiveness depends on proper implementation, accessibility, and stakeholder support. Future research should empirically evaluate the impact of these reforms on SME behavior using quantitative methods, explore longitudinal compliance trends, and investigate the moderating effects of trust in tax authorities.