On-line tax filing is one of the e-government services that is gaining importance for public to perform their responsibility to the country. In an effort to maintain a modernized tax administration system, the Kenya Revenue Authority developed iTax, an online filing (e-filing) that integrates the processes of registration for tax purposes, tax preparation, tax filing and consequently tax payment. Despite the rapid adoption of e-filing in Kenya, the filing system is still unreliable especially at peak period and on voluntary usage which lead to low level of compliance perceived by taxpayers. The study investigates the impact of online tax filing on tax compliance among MSE in Kibwezi sub-county. The study outlines a detailed literature review and identifies the variables for this research to be taxpayers’ perception towards online filing, taxpayers’ technical skills of filing tax returns and tax compliance. The study was based on descriptive survey research design. The information required for the study was collected from primary sources using the self administered questionnaire and interview schedule. A target population was 1,800 MSE. A total sample size of 316 was picked as representative of the target population. Simple random sampling was used to get respondents. Data was collected by means of questionnaire constructed by the researcher and administered on three hundred and sixteen MSE in Kibwezi Sub County. Pilot study was carried out to guard against using unreliable instruments. Descriptive statistics and inferential statistics were used to analyse the data. The validity of the instruments was tested by research experts from Kenyatta University and KRA. Reliability of data collection instrument was through split-half testing. The Statistical Package for Social Sciences (SPSS) version 21.0 was used to analyse the data collected. Data was analysed using t-test at coefficient alpha (α) level of 0.05 to test the relationship between independent and dependant variable. The findings of this study will serve as a useful guideline not only for devising strategies to promote e-government services, particularly tax e-filing service but also to improve the performance of the e-filing system. The public at large will benefit from the adoption of online tax filing while KRA will improve tax compliance. The findings of the study was that online tax filing do affect tax compliance level among MSE as far as perception on online tax filing and technical skills of filing tax returns were concerned. The correlation analysis indicate that there was negative correlation between perception towards online tax filing and tax compliance while there was a positive correlation among technical skills of filing tax returns. From regression analysis, it was revealed that holding perception on online tax filing and technical skills of filing tax returns to a constant zero, tax compliance will stand at 0.712. The summary, conclusion and policy implication have been done. Finally, the area for further research has been identified.