Moderating effect of technology readiness on the relationship between electronic tax invoice adoption and its determinants among small and medium enterprises in Embakasi sub-county, Nairobi, Kenya
DOI:
https://doi.org/10.58857/JFAE.2026.v03.i02.p03Keywords:
perceived benefit, perceived security, rational trust, technological readiness, electronic taxAbstract
The purpose of this study was to examine the moderating effect of technological readiness on the relationship between perceived benefit, perceived security, relational trust and the adoption of electronic tax invoices among small and medium enterprises (SMEs) in Kenya. Guided by the Innovation Diffusion Theory, the Technology Acceptance and Use of Technology Theory, and the Standard Economic Theory, the study employed an explanatory research design targeting 859 SMEs in Embakasi Sub-County. A sample of 273 SMEs was selected through stratified and simple random sampling techniques. Data were collected using semi-structured questionnaires and analyzed using descriptive and inferential statistics, including regression analysis. The findings revealed that perceived benefit, perceived security, and relational trust all had positive and statistically significant effects on electronic tax invoice adoption. Additionally, technological readiness was found to significantly moderate these relationships, enhancing the adoption process. The study supports theoretical perspectives emphasizing the importance of perceived advantages, trust, and security in technology adoption. It recommends that SME managers focus on improving technological readiness and trust-building initiatives, while policymakers should invest in supportive legal frameworks, digital infrastructure, and capacity building to drive broader adoption of electronic tax systems among SMEs.
Downloads
References
Acharya, S. (2013). A note on stable limit theory for the OLSE with non usual rates and the robust Wald test. Communications in Statistics - Theory and Methods, 47(1),28-41.
AlAwadhi, S., Morris, A., & Wynne, A. (2009). The effect of attitudes on the behavioral intention to adopt e-government services among Kuwaiti citizens. Journal of Enterprise Information Management, 22(6), 682-703.
Almarri, K., Alomari, A., & Almajali, D. (2021). SMEs' intention to adopt electronic invoicing in the UAE: The role of perceived benefits, trust, and perceived security. Journal of Business Research, 123, 690-701.
Al-Mudimigh, A. S., Zairi, M., & Al-Mashari, M. (2012). The adoption of electronic invoicing by SMEs in Saudi Arabia: An exploratory study. International Journal of Electronic Business Management, 10(3), 182-195.
Almutairi, A., Qureshi, M. A., & Baabdullah, A. M. (2019). Perceived Security and Trust towards Electronic Tax Invoicing (ETI) Adoption: A Study of Saudi Arabian SMEs. Sustainability, 11(11), 3065.
Awai, E. S., & Oboh, T. (2020). Ease of paying taxes: The electronic tax system in Nigeria. Accounting and taxation review, 4(1), 63-73.
Baron, R. M., & Kenny, D. A. (1986). The Moderator-Mediator Variable Distinction in Social
Belanger, L. C. (2005). The utilization of e-government services: Citizen trust, innovation and acceptance factors. Information Systems Journal, Vol. 15 No. 1, pp. 5-25.
C. Kun, K. L. (2008). User evaluation of tax filing websites. Journal of online information Review, 32(6), 842-859.
Chang M. S., & Younus, S. (2013). Determinants of tax-compliance behaviour explored by slippery: An evidence from small business owner. Journal of Management Sciences, 6(2), 33-47.
Chang, Y. C., Chang, K. H., & Chang, T. K. (2013). Applied column generation-based approach to solve supply chain scheduling problems. International Journal of Production Research, 51(13), 4070-4086.
Chen, L., Hong, W., & Li, S. (2020). Examining the determinants of Chinese SMEs' electronic tax filing adoption: The moderating role of trust. Journal of Business Research, 112, 60-70.
Costello, A. B., & Osborne, J. W. (2005). Best practices in exploratory factor analysis: Four recommendations for getting the most from your analysis. Practical Assessment, Research & Evaluation, 10(7), 1-9.
Cuong, T. T., Thao, T. P., & Linh, B. P. (2023). The Impact of Job Satisfaction on Job Performance of Tax Officials: An Empirical Study in Vietnam. International Journal of Professional Business Review: Int. J. Prof. Bus. Rev., 8(10), 4.
E. Moyi and E. Ronge. (2006). Taxation and tax modernization in Kenya and options for further reforms. Nairobi, Kenya: Institute of Economic Affairs.
Fidler, F., & Wilcox, J. (2019). Null hypothesis significance testing: A review of an old and continuing controversy. Psychological Methods, 24(4), 411-427.
Fu, J. F. (2006). Acceptance of electronic tax filing: a study of taxpayer intentions. Information and Management, Vol. 43 No. 1, pp. 109-126.
Göritz, A. S. (2020). Recommendations for improving response rates in student and other populations. International Journal of Social Research Methodology, 23(2), 189-199.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2019). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (2nd ed.). Sage.
Hart and Saunders T.L. & Tran, M. D. (1997). Determinants influencing tax compliance: The case of Vietnam. The Journal of Asian Finance, Economics, and Business, 7(2), 65-73.
Hart, P. a. (1997). Power and trust: Critical factors in the adoption and use of electronic data interchange. Organization Science, Vol. 8 No. 1, pp. 23-42.
Hayes, A. F. (2013). Introduction to mediation, moderation, and conditional process analysis: A regression-based approach. Guilford Press.
Hernandez-Ortega & Puteh Salin, A. S. A. (2012). Improving tax compliance via tax Education experience. Management & Accounting Review (MAR), 15(2), 1-20.
Hernandez-Ortega, B. (2012). Key factors for the adoption and subsequent use of electronic invoice. Vol. 50, pp. 15-30.
Hernandez-Ortega, B., & Jimenez-Martinez, J. (2013). Performance of e-invoicing in Spanish firms. Information Systems and E-Business Management, 11, 457-480.
Hsu, C. L., & Yen, C. H. (2018). Understanding the adoption of electronic tax filing systems: Technology readiness, privacy concerns, and perceived risk. Journal of Enterprise Information Management, 31(6), 830-847.
Huang, Y., & Fang, Y. (2017). Perceived benefits, costs and barriers to the adoption of electronic tax invoicing: A study of Chinese small and medium-sized enterprises. Information Technology & People, 30(1), 179-202.
Hwang, J., & Kim, Y. (2012). Understanding customer acceptance of e-banking services: An extension of the technology acceptance model. Journal of Business Research, 65(6), 789-800.
Hyz, U., & Bougie, R. (2010). Research methods for business—A skill building approach. 6th edition. West Sussex: John Wiley and Sons.
Iacovou, C. B. (1995). Electronic data interchange and small organizations: adoption and impact of technology. MIS Quarterly, Vol. 19 No. 4, pp. 465-485.
Johnson, A. B., Smith, C. D., & Williams, E. F. (2018). The Role of Relational Trust in Electronic Tax Invoice Adoption. Journal of Business Technology, 42(3), 156-170.
Johnson, J. B. (2020). Assumption testing in the analysis of variance. The Quantitative Methods for Psychology, 16(2), 110-119.
Kemper, A. (2003). Reliability, validity and true values in surveys. Social Indicators Research, 78(1), 85-110.
Kim, H. W., Chan, H. C., & Gupta, S. (2020). Ensuring the quality of survey data: The role of reliability and validity. MIS Quarterly Executive, 19(1), 1-16.
Komba, G. P., & Lema, E. M. (2019). Factors influencing electronic tax (e-tax) invoice adoption among small and medium enterprises in Tanzania: A case of Dar es Salaam region. Journal of Economics and Business, 2(2), 30-47.
Kothari, C. R. (2002). Research Methodology; Methods and Technique, 2nd Edition: New Age International P Ltd.: New Delhi.
Krishnan, R. M. (2006). When does trust matter to alliance performance? Acad. Management J, Vol. 49 No. 45, pp. 894-917.
Lee, H. C. (2016). Can electronic tax invoicing improve tax compliance? A case study of the Republic of Korea's electronic tax invoicing for value-added tax. A Case Study of the Republic of Korea's Electronic Tax Invoicing for Value-Added Tax (March 7, 2016). World Bank Policy Research Working Paper, (7592).
Lee, J. H., & Park, S. K. (2020). Reassessing the Role of Relational Trust in Electronic Tax Invoice Adoption: A Comparative Analysis. Contemporary Business Research, 46(5), 678-692.
Lee, S. M., & Kim, H. J. (2019). Factors affecting the adoption of electronic tax filing: Evidence from South Korea. International Journal of Electronic Commerce, 23(1), 98-123.
Lin, C.-H., & Lin, I.-C. (2013). The adoption of electronic tax invoicing among SMEs: A study of perceived benefits. Journal of Global Information Management, 21(4), 17-36.
Ma, X., & Sun, Y. (2021). Understanding the determinants of taxpayers' adoption of electronic tax filing in China: The role of trust. Technological Forecasting and Social Change, 166, 120618.
Manly, D. T. (2005). Attracting non-filers through amnesty programmes. Journal of American Taxation Association, 27, 75-95.
Mwacha, J. M., & Kashasha, L. K. (2021). Determinants of electronic tax (e-tax) invoice adoption among small and medium enterprises in Tanzania. International Journal of Scientific and Research Publications, 11(1), 300-311.
Nguyen Charity, M., Chan, W. (2020). Literature review on the impact of tax knowledge on tax compliance among small medium enterprises in a developing country. International Journal of Entrepreneurship, 22(4), 1-15.
Nguyen, M., & Nguyen, J. H. (2020). Economic policy uncertainty and firm tax avoidance. Accounting & Finance, 60(4), 3935-3978.
Nwabachili, C. O., Nwankwo, C. B., & Ugwu, M. O. (2024). Legal assessment of electronic tax payment systems: Nigeria, Kenya and tanzania and in perspectives. Nnamdi Azikiwe University Journal of International Law and Jurisprudence, 15(1), 129-140.
Nwokah, N. G., Okorie, G. C., & Okafor, C. E. (2019). Determinants of e-invoicing adoption in Nigeria: A study of selected small and medium enterprises in Aba metropolis. International Journal of Economics, Commerce and Management, 7(5), 33-46.
OECD, O. (2004). The OECD principles of corporate governance. Contaduríay Administración, , (216).
OECD. (2015). Addressing the tax challenges of the Digital Economy. OECD.
Ogunleye, O. M., & Akinbode, O. R. (20182020). An empirical analysis of electronic tax (e-tax) adoption in Nigeria: A study of small and medium enterprises (SMEs). Academy of Accounting and Financial Studies Journal, 22(3), 1-14.
Okunogbe, O., & Santoro, F. (2023). Increasing tax collection in African countries: The role of information technology. Journal of African Economies, 32(Supplement_1), i57-i83.
Oso, J., & Open, E. (2008). Multiple Regression that Researchers should always test. Practical Assessment, Research, and Evaluation, 8(2).
Psychological Research. Conceptual, Strategic, and Statistical Considerations. Journal of Personality and Social Psychology, 51(6), 1173–1182. https://doi.org/10.1037/0022-3514.51.6.1173
Qi, Y., & Che Azmi, A. (2021). Factors affecting electronic invoice adoption and tax compliance process efficiency. Transforming Government: People, Process and Policy, 15(1), 150-168.
Razali, N. M., & Wah, Y. B. (2011). Power comparisons of Shapiro-Wilk, Kolmogorov-Smirnov, Lilliefors, and Anderson-Darling tests. Journal of Statistical Modeling and Analytics, 2(1), 21-33.
Rosli, A. H., Yusof, R. M., Ahmad, S. B., & Shafie, R. A. (2018). Determinants of e-tax adoption among Malaysian SMEs: A conceptual model. Journal of Advances in Information Technology, 9(1), 1-8.
Saunders, P. (2007). Social theory and the urban question. Routledge.
Shah, S. Z. A., Jaffari, A. R., & Hussain, J. (2018). Understanding the determinants of e-tax adoption intention in developing countries: Evidence from Pakistan. Journal of Business Research, 91, 238-251.
Sheehan, K. B. (2020). E-mail survey response rates: A review. Journal of Computer‐Mediated Communication, 25(2), 113-133.
Shen, C. C., Wu, M. L., & Lin, S. S. (2020). Understanding the determinants of electronic tax filing intention: Evidence from small and medium-sized enterprises in Taiwan. Journal of Enterprise Information Management, 33(3), 593-611.
Shi, D., Lee, S. Y., & Maydeu-Olivares, A. (2019). Understanding and Using Factor Scores: Considerations for the Applied Researcher. Practical Assessment, Research & Evaluation, 24(1), 1-13.
Shim & SongSubekti, I., & Baridwan, Z. (2016). Trust and uncertainty orientation: An efforts to create tax compliance in social psychology framework. Procedia- Social and Behavioral Sciences, 211, 938-944.
Shim, T. S., & Song, I. K. (2016). Critical success factors of the web-based tax invoice system in Korea. KSII Transactions on Internet and Information Systems (TIIS), 10(9), 4487-4507.
Shim, T. S., & Song, I. K. (2016). Critical success factors of the web-based tax invoice system in Korea. KSII Transactions on Internet & Information Systems, 10(9).
Smith, J. K., & Smith, L. F. (2019). Validity and reliability in research instruments. Journal of the American Academy of Physician Assistants, 32(12), 1-3.
Smith, P. (2019). The importance of statistical assumptions. Journal of Research Practice, 15(2), Article V.
Susilo, D. J. (2022). Effect of Electronic Tax Invoice Adoption on Transparency of Indonesia Stock Exchange Main Board Companies. Journal of Indonesian Applied Economics, 10(2), 153-179.
Sweeten, G. (2016). Lecture 8: Heteroskedasticity Assumption MLR5 : Homoskedasticity. Class Lecture.
Tan, J., Li, C., Chen, Y., & Wang, S. (2019). Factors affecting the adoption of electronic tax filing in China: A trust-based perspective. Information Systems Frontiers, 21(3), 577-593.
Tilahun, M. (2019). Determinants of tax compliance: a systematic review. Economics, 8(1), 1-7.
VassarStats. (2020). Understanding p-values. Retrieved from http://vassarstats.net/.
Wahyuni, D., & Suhardi, B. (2020). The role of perceived ease of use, perceived usefulness, and perceived security in the adoption of e-tax. Journal of Accounting and Investment, 21(1), 1-11.
Walsh, H. O., & Roespinoedji, D. S. (2021). The role of tax education in supply chain management a case of Indonesian supply chain companies. Polish Journal of Management Studies, 18.
Waris, M. K. (Enhancing revenue capacity to enhance human welfare). Taxation and state building in Kenya: Kenya Report: Tax Justice Network-Africa (TJN-A).
Wooldridge, J. M. (2019). Introductory econometrics: A modern approach. Nelson Education
Yang, C. C., & Hsu, C. L. (2012). The effect of website quality on customer satisfaction and purchase intention: Implications for e-businesses. Procedia-Social and Behavioral Sciences, 57, 217-224.
Yu, T. H., & Fang, K. (2019). Perceived technology readiness and e-invoicing adoption among SMEs: An empirical study in Taiwan. Sustainability, 11(23), 6613.
Zhang, J., Hu, Q., & Zhu, K. (2018). Exploring the determinants of e-tax adoption intention: Evidence from Chinese SMEs. Electronic Commerce Research and Applications, 29, 117-129.
Zhang, Z., & Zhang, H. (2020). Assumption Checking for Parametric Models. Springer.
