Impact of Taxes on Performance of Small-Scale Business Enterprises in Kabale Municipality.
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Date
2023
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Publisher
Kabale University
Abstract
The study examined the impact of taxes on the performance of small-scale business enterprises in Kabale Municipality. The study concentrated on the following objectives; to assess the performance of taxes on small-scale business enterprises, to investigate the impact of taxes on small-scale business enterprises, and to investigate the possible solutions to challenges affecting small-scale businesses. The researcher used a cross-sectional survey design based on the use of qualitative and quantitative approaches that were adopted to establish the relationship between taxation and the performance of small-scale businesses. The study comprised Managers/owners and employees of small-scale businesses (SSBs) in Kabale Municipality, Kabale District. The study involved 59 respondents. This sample size was assumed by the researcher to be representative enough of the entire population. Questionnaires and interviews were the methods of data collection used.
The study aimed to determine the impact of taxes on the performance of Small business enterprises in Kabale Municipality. The results revealed that the impact of taxes on the performance of Small business enterprises is quite significant. The study further revealed that taxes mainly affect the performance of Small business enterprises through lost sales during the closure of the business premises by URA, the loss of machinery and equipment due to delay in remitting the tax, and the loss of capital due to the fines imposed by URA onto Small business enterprises that default on their tax obligation.
It was concluded that taxes are major limitations to the growth and expansion of Small business enterprises in Kabale Municipality. This is because very little and sometimes nothing is left after covering expenses and taxes to allow for the expansion and growth of the existing Small business enterprises. This was clearly shown by the fact that over 60% of all the businesses sampled in Kabale Municipality had occupied their current premises, and over 70% of businesses surveyed had been closed at one time due to non-payment of taxes.
The study recommended that Kabale Municipal Council should find a way of assessing the tax in that the Small business enterprises should pay early in the financial year to give enough time to the businesses to pay their dues rather than make an assessment and demand for payment spontaneously. Kabale Municipal Council should introduce a scheme that allows taxpayers to pay the tax obligation in installments over a given period as opposed to lump some at once.
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Keywords
Impact, Taxes, Performance, Small-Scale Business Enterprises, Kabale Municipality
Citation
Katusiime, Allen (2023). Impact of Taxes on Performance of Small-Scale Business Enterprises in Kabale Municipality. Kabale: Kabale University.