Effects Of Ict Support Services On Revenue Collection
[CASE STUDY OF ENYA REVENUE AUTHORITY]

1.1 Background of Study

Organizations today have increasingly become aware of the importance of strategic management. This awareness in a system is a critical dimension in the performance of organizations. The actual incidents validate the assumption that despite how sophisticated and modern the business actions of the organization may become, it will be really hard to maintain its growth and effectiveness except if there are strategies that harmonize its operations. According to Wright (2010) “the frequent and uncertain changes, greater competition between firms, the need for continuous innovations, quality enhancement and cost reduction force companies to face the challenge of improving their competitiveness and consequently their performance”. This recognition has pushed strategic management as a key field of study and the restored interest has assisted in the growth of new approaches in running of organizations. The concept of the strategic management thus covers organization-wide issues in the context of a whole range of its operational influences. According to Pearce & Robinson (2009) “strategic management is the process of specifying an organization's objectives, developing policies and plans to achieve these objectives and allocating resources so as to implement the plans”. By practicing effective strategic management organizations seek to reposition themselves in order to create new competences and capacities to exploit and deal with new situations and this is made possible through provision of overall direction to the organization by the top management.

Lately Kenya Revenue Authority (KRA) has advanced into recent and wholly integrated revenue administration agency. Tax collection has been on the increase since its inception and caters for over 93%of total government income. Kenya Revenue Authority plays critical roles in facilitation of trade and investments, protection against banned and illegal goods and promoting national security at large. This success is largely attributed to development and execution of strategic planning process and performance management systems. Taxation can be defined as the obligation by government of compulsory levies and contributions on the general public, assets, income, merchandise and business transactions, with an aim of raising government income or revenue for expenditure. The collection of tax revenue is made possible by the government?s statutory organization, Kenya Revenue Authority (KRA). The major reasons for Kenya to enforce taxation include; to collect monies for financing societal services such as health, national security, education and infrastructural developments; secondly, to increase the money sent or catering for the poor; to promote investments; and to protect local markets on domestic products through heavy taxes on unnecessary imports (KRA, 2012).

The Kenyan taxation system is built on three important components; namely tax policy, tax law and tax administration. Tax administration incorporates a set of activities in ensuring that tax is levied based on relevant tax laws and sanctions applied where appropriate. It comprises three interrelated functions, namely; identification of tax liabilities, the collection, prosecution, and penalty activities (KRA, 2012). KRA gets its revenue from the taxes, therefore to ensure a success in this procedure, the tax authorities ought to receive internal support. Thus, the study seeks to investigate the perceived effect of ICT support services on tax collection.

According to Norton (2006) “the of goal Information Systems, was not only to provide citizens, economic organizations, companies and institutions with a range of excellent and effective services, but they also created a new form of citizenship based on the participation of all individuals in the provision of services and the decision- making process which was aided by the intensive use of new Information and Communication Technologies” (Norton, 2006; 25).

The impetus of the study was based around two relevant theories; Institutional theory, which explains how institutional environment can objectively influence the  interaction between departments in the organization to promote effectiveness in revenue collection and the theory of systems which views organizations as systems need to interact with the environment or other organs of the organizations to ensure certain objectives are met.