Effect Of Revenue Collection Processes Innovations On The Financial Performance Of Selected County Governments In Kenya

Abstract

Since the beginning of devolved governments in Kenya, county governments have experienced a number of challenges (Hornsby, 2013). The most outstanding is the inability to meet financial obligations. Most of the county governments in Kenya lack enough finances to fund their recurrent and development budgets which has resulted to instances of strike among workers and stalled projects. In order to meet their financial obligations, county government should devise innovative ways to increase revenue collection. County governments in Kenya are faced with a number of tax collection challenges which include; a narrow tax base which reduces potential revenues and makes the county more dependent than it could be on a small section of society. It is clear from the onset that there is great need for county revenue authorities to have sufficient funds to deliver the much needed community services.The general objective of the study was to investigate the effect of revenue collection processes innovations on the financial performance of selected county governments in Kenya. The specific objectives were to determine the effect of training on revenue collection on financial performance of selected county governments in Kenya, to establish the effect of mobile money payment on financial performance of selectedcounty governments in Kenya, to investigate the effect of online tax remittances on financial performance of selectedcounty governments in Kenya and to examine the effect of revenue database system on financial performance of selectedcounty governments in Kenya.The study adopted a descriptive research design.The target population consisted of all the employees in the county revenue collection department.Simple random sampling technique was used in this study to select the respondents. The total sample in this study was124 respondents.Data was primarily collected to provide information regarding a specific topic. Primary data was gathered by use of a semi-structured questionnaire and captured through a 5- point type Likert scale.The collected primary data wasanalyzed usingStatistical Package for Social Science (SPSS)version 20. A linear regression analysis wasconducted on the data set. ThePearsonProductMoment wasused to analyze the data in which correlation coefficient (R)and the coefficient of determination (R 2 ) of the variableswasestablished. The findings from the analysis wereorganized, summarized and presented using tables and pie charts.In relation to the study findings, the study concluded that,training on revenue collection, mobile money payment, online tax remittances and revenue database systeminfluences financial performance of selected county government in kenya. The findings revealed a strong positive relationship between the independent variables and the dependent variable. The study recommends that all the staff that are in revenue department in all county goverments should be trained on revenue collection. The study also recommends that senior managers and supervisors should nominate all their employees for training on revenue collection. Scholarships and sponsorships should be made available for all staff in the revenue department to be trained on revenue collection.