Factors influencing revenue collection in Kitui county Government, Kenya

Abstract

Revenue collection in counties in Kenya is a crucial aspect of their financial management and governance. Most of Kenyan County governments grapple with revenue challenges, facing difficulties in generating sufficient funds for essential services and development initiatives. The purpose of this study was to establish factors influencing revenue collection in county governments, specifically focusing on Kitui County. Specific objectives included; to establish the effect of technological innovation, employees’ competence and legal framework on revenue collection in Kitui County, Kenya. This study was anchored on Optimal taxation theory, Technology Acceptance model, and Subsidiary Theory of Taxation. The study employed an explanatory research design and involved340 employees of Kitui County government as target population. The study adopted stratified random sampling and purposive sampling techniques and further, the Krejcie and Morgan table (t table) was used to give an ideal sample size of 181. The researcher obtained data from primary sources using self-administered questionnaires. Both descriptive and inferential analysis was carried out with the help of the SPSS software. The study adopted regression analysis to confirm the influence of study factors on revenue Collection in Kitui County. The findings revealed that the predictors (technological innovation, employee competence and legal frameworks) collectively contribute to 37.5% prediction of the revenue collection at the County. Specifically, one-unit positive change in technology innovation, influences revenue collection by 0.350(35.0%); a unit increase in employee competency is associated with an estimated increase of 0.084 (8.4%) in the revenue collection at the County and a unit increase in legal frameworks is associated with an estimated increase of only 0.026 (2.6%) improvement in revenue collection at the County. Hypotheses testing revealed that technological innovation and legal framework have a significant influence on revenue collection in Kitui Government, Kenya, (p- value=0.000<0.05) and (p-value=0.014<0.05) respectively. However, employees' competence was found not to have any significance effect on revenue collection in this context (p-value=0.290>0.05). The findings underscored the significant contributions of technological innovation and a well-structured legal framework in predicting revenue collection outcomes, highlighting their importance in the County's fiscal strategy. These results have practical implications, suggesting that investments in technology and legal reforms should be prioritized by the County government to optimize revenue generation. The study recommended that he County government continues to invest in advanced technological solutions, prioritize continuous training programs for its workforce and enhance policies, rules, and regulations governing revenue collection at the County