Effects Of Revenue Collection Practices On County Government Financial Performance In Kenya

Abstract

Revenue collection refers to the process of boosting government income through various means, including taxes, fees, and other revenue sources. It plays a vital role in public finance by providing the funds needed for government expenditures and services. This research aims to examine how revenue collection practices impact the performance of county governments in Kenya. The study's specific objectives were to assess the effects of different revenue collection methods, such as automatic payments, in-person collections, automatic billing, and mobile payment collections, on the financial performance of county governments. The research methodology employed a descriptive research design and involved data collection from 141 individuals working in the revenue collection departments of Kenya's 47 counties. The survey drew on several theoretical frameworks, including Agency theory, Resource Based View theory, Technology Acceptance theory, Optimal Taxation theory, and Institutional theory. Participants completed questionnaires to provide primary data, and data analysis was carried out using SPSS version 25. Both inferential and descriptive statistics were used to quantitatively analyse the data, while content analysis was employed to assess qualitative data in a statistical manner. The study utilized the Pearson product-moment correlation to determine the relationship between independent and dependent variables and used multiple regression to gauge the extent and direction of the impact of revenue collection practices on financial performance. The study's findings indicated positive perceptions related to convenience, citizen satisfaction, revenue collection efficiency, transparency, and security when it comes to automatic revenue payment methods. In-person collection methods were viewed as effective in maintaining personal connections with citizens and positively impacting transparency and revenue collection rates. However, concerns were raised regarding payment delays, lower compliance rates, accessibility challenges, long waiting times, cash handling risks, and high maintenance costs. Ultimately, the study concluded that in-person collection practices did not have a significant impact on county financial performance. On the other hand, automatic billing revenue collection were generally perceived positively by respondents, with perceived benefits including simplified revenue collection processes, improved customer satisfaction and loyalty, and enhanced transparency. The study recommended that automatic billing revenue collection is likely to have a significant positive influence on county financial performance. Mobile money payment practices received favourable feedback, with respondents indicating improvements in accuracy, collection ease, efficiency, and payment compliance. The study concluded that revenue collection through mobile money payments is highly statistically significant and is likely to have a substantial positive impact on county financial performance. As a result, the study recommended that county governments consider further investments in and development of automatic revenue payment systems, with a focus on enhancing convenience, transparency, and security to maximize their potential to improve financial performance. Additionally, the research proposed that similar studies be conducted in other public institutions in Kenya