Outsourcing of Revenue Collection on Optimization of Revenue Collection in Western Kenya

Isaiah Sifuna Walubengo
School of Business and Economics
Kisii University
P.O Box 408-40200
Kisii, Kenya
Email: walubengosifuna10@gmail.com

Abstract: In a context of rapidly rising government needs and insufficient revenues to meet investment needs, county governments are increasingly looking for innovative means of outsourcing tax collection. Though county Governments have made some progress in revenue collection, revenue collection is yet to be optimized. This paper sought to examine how outsourcing revenue collection can optimize revenue collection in western Kenya. The study employed a survey research design. The target population consisted of all revenue staff in the 4 identified counties. A census inquiry was used to study all the revenue staff in the selected counties. The sample from counties consisted of 32 staff from Busia, 29 Kakamega, 24 Bungoma, and 25 from Vihiga leading to 112 sampled respondents. Data was collected using a questionnaire after ascertaining its content validity through experts and internal consistency reliability through the Cronbach alpha result. Data were analyzed using descriptive and inferential statistics. The study revealed that a correlation exists within western counties (p<0.000) between outsourcing and optimization of revenue collection in Kenya. This implies that outsourced revenue collection increased collected revenue, therefore, enhancing optimization of revenue collection within the western counties. The study concluded that outsourcing affects the optimization of revenue collection in Western Counties. It is recommended that the revenue collection department of the county government needs to adopt proper contract reforms precisely in the public documents and regulations to stipulate clearly the responsibilities of private revenue collectors outsourced for effective revenue collection for enhanced service delivery in the counties.