Moderating effect of taxpayer behavior on integrated customs management system, standardized procedures and tax knowledge on customs duty compliance at Malaba one-stop-border-post, Kenya

Abstract

The public has for long time complained about the performance of customs and border control department due to its numerous complex procedures for clearance of goods imported to the country. The main objective of this research is to determine the moderating effect of taxpayer behavior on integrated customs management system, standardized procedures and tax knowledge on customs duty compliance at Malaba one-stop-border-post, Kenya. The study was anchored on the following specific objectives; to determine the effect of Integrated Customs Management System, Standardized procedures and tax knowledge on customs duty compliance at Malaba one-stop-border-post, Kenya. The moderating variable was taxpayer behaviour. The following theories were guide to the study; Diffusion of Innovations, Human Capital Theory, Theory of Customs Union and Social rule system theory. The independent variables were Integrated Customs Management System, Standardized procedures and tax knowledge. The dependent variable was customs duty compliance while the moderating variable was taxpayer behavior. A pilot test was conducted with 21 respondents from the Namanga border, who were asked to evaluate the questionnaire on aspects such as clarity, readability, and comprehensiveness. This study employed the explanatory research design that involves the use of structured questionnaires in collecting data from the respondents. The target population was 213 clearing and forwarding officer at Malaba one stop border post. Out of 213 respondents targeted, 166 questionnaires were correctly filled and returned. indicating 77.9% response rate. The study also conducted multiple regression analysis to develop a mathematical model that connects the independent and dependent factors. The study found that Integrated Customs Management System had a positive and significant effect on customs duty compliance β =0.325 p=0.043<0.05. The study also found that Standardized procedures had a positive and significant effect on customs duty compliance β =0.464 p=0.000<0.05. Also, tax knowledge positively affects customs duty compliance β =0.258 p=0.040. The study also found that taxpayer behavior had a positive and significant effect on customs duty compliance β=0.227 p-value =0.043<0.05. The study also further found that tax behavior moderates the relationship between Integrated Customs Management System and customs duty compliance β=0.359 p-value =0.000<0.05. The study also found that tax behavior moderates the relationship between Standardized procedures and customs duty compliance β=0.310 p-value =0.000<0.05. Lastly the study found that tax behavior moderates the relationship between tax knowledge and customs duty compliance β=0.707 p-value =0.000<0.05. For the Kenya Revenue Authority (KRA), the results indicate a need to enhance the deployment and functionality of the ICMS to ensure seamless customs operations and to foster a culture of compliance. KRA should also ensure that standardized procedures are effectively communicated and adhered to at all border points. Furthermore, the Social Rule System Theory is supported, as it illustrates that the social behavior of taxpayer’s adherence to rules and regulations moderates and strengthens the effectiveness of compliance measures. The significant moderation effects revealed that improved taxpayer behavior enhances the effectiveness of ICMS, standardized procedures, and tax knowledge in achieving higher compliance rates. Future research should critically examine specific ICMS components, effective taxpayer education strategies, and long-term behavioral interventions and their effects on customs duty compliance. the study demonstrates that taxpayer behavior significantly moderates the relationships between ICMS, standardized procedures, tax knowledge, and customs duty compliance.