Abstract:
This paper assessed the effect of domestic tax reforms on Micro and Small Enterprises tax compliance in Kamukunji
market in Nairobi, Kenya. The study was premised on the economic theory, neo-classical theory, psycho sociological theory and benefit theory. The target population was 1,240 Micro and Small Enterprises operating in
Kamukunji market. Yamane (1967) formula was employed to come up with a representative sample size of 302
SMEs for the population. Primary data was collected using questionnaires. To ensure questionnaire validity,
questionnaire inconsistencies that arose from pilot study were rectified. The coded data was then fed into SPSS
version 26 for reliability testing. It was found that there was linearity, multicollinearity test results were
satisfactory, that is, between 1and 10 and there was no heteroscedasticity at 5% degree of freedom. Inferential and
descriptive statistics were used in data analysis. Model significance was tested using simple regression and variance
analysis, correlation and, coefficient of determination. The study found out that domestic tax reforms have a
significant influence on Micro and Small Enterprises tax compliance, that is, F (3, 298) = 18.660, p = 0.000 <0.05.
The study recommended that Kenya Revenue Authority should administer tax education and conduct compliance
audit checks. These findings are important to tax administrators in enacting tax reforms, Micro and Small
Enterprises in making investment decisions and researchers for reference and further studies
