In recent years, the challenge of ensuring tax compliance has become the centre of both academic and policy discourse in Kenya due to the importance of tax revenue for the development of the country. The integrated tax system was introduced in Kenya in 2011 with the overall aim of improving tax compliance and hence the performance of the Kenya Revenue Authority. However, despite the introduction of the i-Tax system, Kenya Revenue Authority has been unable to meet its revenue targets. For example, a report by the auditor general issued in 2018 indicated that the country was likely to lose Kshs 18.5 billion of Value-Added-Tax from approximately 20 large tax payers. The aim of the study was to investigate the effect of iTax system on the performance of Value-Added- Tax by large taxpayers in Nairobi County. The study was guided by the following objectives to determine the effect of the management of users, accuracy of assessment of taxation, and detection of non-compliance on the performance. The study was anchored by the Optimal Commodity Sales Taxes Theory, Expediency Theory of Taxation, and Resource Based Theory. The study adopted the descriptive research design. The study sampled the thirty-five account managers in charge of the 1,167 large taxpayers in Nairobi County. The study used primary data collected using questionnaires. The study established that the management of users, the accuracy of assessment of taxation, and the detection of non-compliance had improved following the introduction of the iTax system. However, the I Tax system had not been able to ensure and enforce full compliance. The study concluded that the use of I Tax system made it easier to manage the large tax payers but the system was not able to motivate the defaulters to make payments. The study recommends that mechanisms should be put in place to compel defaulters to make full payments. Using the multivariate analysis, the study established that the management of users, accuracy of assessment of taxation, and detection of non-compliance had a positive and statistically significant effect of the VAT collected from large taxpayers in Nairobi County, Kenya. The study recommends that Kenya Revenue Authority should continue using the integrated tax systems and to upgrade it to ensure full compliance
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