Despite the increasing need to raise the level of revenue collection, Kenya still faces the challenges of low tax compliance. The broad objective of the study was to determine the effect of social norms on value tax compliance among small and medium enterprises in Embu town, Kenya. The study was guided by social influence theory. The study adopted an explanatory research design and targeted a population was 1050 small and medium enterprises in Embu town. A sample size of 290 was drawn from this population and the response rate was 74%. Primary data collection was employed using closed structured questionnaires from study's objective. The data was analyzed using descriptive, inferential statistics and multiple linear regression analysis. A correlation analysis conducted before testing for coefficients shows that there was a positive and significant linear relationship between social norms and value tax compliance r=0.696. The coefficient table indicates that social norms have a positive effect on VAT compliance β= 0.138 (p=0.006<0.05). Based on the findings the study recommends that Kenya Revenue Authority integrate insights from behavioral economics into tax compliance theories. Explore how psychological factors such as social norms can be incorporated into models predicting taxpayer behavior. Further research may be conducted to investigate the effect of technology on VAT compliance.
Timothy et al. (Tue,) studied this question.