Determinants of Electronic Tax Invoice Adaption among SMEs in Embakasi Sub-County, Nairobi County

Risper Ouso
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Risper Ouso: Bomet University College

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 5, 1649-1667

Abstract: The purpose of this study was to examine the effect of perceived benefit, perceived security, and relational trust on the adoption of electronic tax invoices among small and medium enterprises (SMEs) in Kenya. The study was guided by the Innovation Diffusion Theory, the Technology Acceptance and Use of Technology Theory, and the Standard Economic Theory. An explanatory research design was adopted, targeting a population of 859 SMEs operating in Embakasi Sub-County. A sample size of 273 SMEs was selected using stratified and simple random sampling techniques. Primary data were collected through semi-structured questionnaires and analyzed using descriptive statistics and inferential methods, including regression analysis. The results showed that perceived benefit, perceived security, and relational trust all had significant and positive effects on the adoption of electronic tax invoices. The study concludes that technological readiness among SMEs enhances the positive influence of these factors on e-tax invoice adoption. These findings support the Technology Acceptance and Use Theory by demonstrating the importance of intention to use technology, and align with the Innovation Diffusion Theory by showing how perceived advantages, trust, and security drive adoption. The study recommends that SME management prioritize these factors when implementing e-tax invoicing, while policymakers should develop supportive legal frameworks and invest in infrastructure and human capacity to facilitate technology adoption.

Date: 2025
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