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The Challenges of Administration of Excise Tax Petroleum Oils in Kenya (1995-2002)

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dc.contributor.author Kitenga, Gabriel
dc.date.accessioned 2019-10-02T08:46:44Z
dc.date.available 2019-10-02T08:46:44Z
dc.date.issued 2005
dc.identifier.uri http://erepo.usiu.ac.ke/11732/4885
dc.description A Project Report Submitted to the School of Business In Partial Fulfilment Requirement For Degree Of Master�s In Business Administration en_US
dc.description.abstract The purpose of this study was to identify the operational and institutional challenges in controls that contributed to the variance between targeted and actual revenue from petroleum oils in Kenya between the years 1995 and 2002 and subsequent decline in revenue from petroleum oils. The above period unique noting that the Government of Kenya formed Kenya Revenue Authority (KRA) in 1995 and issued it the mandate to collect and account for tax revenue; and in 2002, a change of government in Kenya was affected. Specifically, the study set out to find out what human resource and technological challenges existed in the administration of excise taxes on petroleum oils in Kenya. It also sought to find out the external and compliance challenges in the administration of petroleum taxes. The study was descriptive in nature. A purposive sampling method was used to identify a sample of 20 officers involved in the administration of excise taxes on petroleum oils. Primary data was collected using questionnaires distributed to all customs officers working in bonded oil installations. Data received from this exercise was collated and analyzed using regression methods. Secondary data was obtained from KRA and the Ministry of Finance. This information was collated and analyzed to determine a number of concerns like the relationship between excise revenue and inflation, the contribution of excise tax revenue to total Kenya Government revenue, and the response of excise tax revenue to variances in GDP. Additional information was obtained from KRA to determine the extent of adulteration of petroleum oils in Kenya. The human resource challenges in the administration of excise tax on petroleum oils in Kenya found by the study were lack of enough officers in the oil installations and lack of training of staff for the job they are deployed to perform. The technological challenges in the administration of petroleum Oils found by the study were that the installations did not have adequate equipment for monitoring quantities of petroleum Oils and assessing taxes. Most installations did not have dipping equipment. It was also found that flow meters were not being frequently calibrated to ensure their integrity. The external challenges that were discovered were adulteration and general decline of economic growth Adulteration of Petroleum oils was found to be most prevalent in Coast Province and western Kenya. There was also adulteration using kerosene to dilute diesel. This was round to be prevalent in Nairobi and its environs. Through regression analysis, it was found that there is a strong positive linear relationship between the GDP and Excise Duty collected. As GDP increased by one unit, Excise revenue from petroleum Oils also increased by seventy four percent. It was concluded from the findings that provision of adequate staff skills mix was an administrative challenge that contributed to the inability Of KRA to meet its targets on excise tax revenue from petroleum Oils. It was also concluded that there exists a skills gap in the administration of excise tax on petroleum oils in Kenya. On technological challenges, it was concluded that lack of resources and appropriate technological infrastructure contributed to the inability of KRA to meet its targets on excise tax revenue from petroleum Oils. The study also concluded that the decline in general performance of the economy caused a decline in Excise revenue. It was further concluded that established controls in oil installations were not being fully complied with. The study recommends that Customs officers working in oil installations should be given further training related to the duties they are performing to add skills and improve on their performance and competence. More staff should be deployed at various installations to reduce workload hence improving performance and increasing frequency of inspecting the facilities. The study also recommends that Computers should be introduced to improve the frequency of updating records and for the records to be kept more accurately and easily accessible for the purposes of auditing and conducting periodic checks. Further, there should be frequent audit of marketers' records by the customs Officers. It is further recommended that KRA looks for suitable software for managing stock levels of petroleum Oils. Dipping equipment should also be availed to Officers working in Oil installations in order to improve on the frequency of dipping. Further study should be to determine whether revenue yields can be increased by changing the tax regime to single tax rate on oils for all products. Another study should be done to determine whether revenue can be increased through adopting a tax regime that varies directly with changes in the world prices of oil. en_US
dc.language.iso en en_US
dc.publisher United States International University - Africa en_US
dc.subject Excise Tax, Petroleum Oils, Kenya en_US
dc.title The Challenges of Administration of Excise Tax Petroleum Oils in Kenya (1995-2002) en_US
dc.type Thesis en_US


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