Abstract

Customs Administrations that do not use audit-based controls usually concentrate their controls entirely at the border and at the time of import, and often apply a 100% physical examination approach. This leads not only to unnecessarily long delays at the border but is also a very ineffective and inefficient use of the limited control and inspection staff at the border. This led to the adoption of post clearance audit (PCA) in Kenya Revenue Authority. This study therefore sought to establish the effect of post clearance tax audit on revenue collection in the Kenyan customs department in Mombasa. The study also sought to determine the effect of customs audit procedures, customs audit standards, customs audit visits and customs pre-arrival clearance on revenue collection in the Customs Services Department in Mombasa. This study used a descriptive research design. The target population of this study was 366 respondents; this included 320 heads of clearing and forwarding firms in Mombasa and 46 staffs working on Customs Services Department in Mombasa. This study used stratified random sampling to select the 30% of the target population. The sample size of this study was therefore 110 respondents. Semi-structured questionnaires was used in this study to collect primary data. Content analysis was used to analyze qualitative data and the findings were then presented in a prose form. On the other hand, Statistical Package for Social Sciences (SPSS version 20) was used to analyze quantitative data. Using this program, quantitative data was analyzed using inferential and descriptive statistics. Descriptive statistics such as mean, standard deviation, frequency and percentages were used in this study. In relation to inferential statistics, the study used correlation analysis to establish the relationship between the independent and the dependent variables. Data was then presented in tables, bar charts and pie charts. The study established that customs audit visits were influencing revenue collection at customs services department most followed by customs pre-arrival clearance, post clearance audit procedures and post clearance audit standards. However, post clearance audit standards do not significantly influence revenue collection at customs services department. The study also established that post clearance audit procedures lead to an improvement in revenue collection and reduces the amount of time it takes to clear goods and hence recommends that the management of the customs department should ensure that the post clearance audit procedures are followed to the letter. The study also recommends that the management of the customs department should update the standards so as to enhance integrity and improve revenue collection. The study further recommends that the government of Kenya should formulate more policies to support and govern customs audit visits.

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