Taxation and performance of selected small scale business in Iganga District, Uganda
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Date
2013-11
Authors
Journal Title
Journal ISSN
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Publisher
Kampala International University; College of Economics and management
Abstract
The study assessed the effect of Taxation on Performance of selected small scale businesses in Iganga District and was based on three specific objectives: (i) to determine the level of Taxation, (ii) to determine the level of Performance of selected small scale businesses in Iganga District, (iii) to establish whether there is a significant relationship between Taxation and Performance of selected small scale businesses in Iganga District. It employed a descriptive correlation survey design, Used SAQ to collect data from 157 out of 259 respondents, using simple random sampling. Data analysis was done using SPSS's frequencies and percentages; means and PLCC. The findings showed that both the level of Taxation and performance was high. PLCC revealed positive and significant relationship between Taxation and performance. The researcher recommended that if Basing on the study findings, the researcher made the following recommendations both to the management and all the key stakeholders of the selected small scale businesses in Iganga District: The study revealed that the biggest problem with the tax paid is that the small scale business community does not understand how the tax is arrived at as well as how it is paid but not because it is too high. The URA in Iganga District should therefore improve on the method of collecting the taxes. It should adopt the closure of business premises on default only as a last resort after all the other methods of collection have failed. This should be an exception and no a rule. Basing on the Ability-to-pay theory of taxation by the American Economic Association of (1939) that guided the study, it was proved that continuous taxation influence performance by clarifying the ability to pay of the selected small scale businesses, this research makes several contributions to the new venture performance literature. First, when researchers are required to use self-reported measures of venture performance, growth and business volume are the dimensions of performance most familiar to and most commonly referenced by the founders. Second, it provides additional evidence for the accuracy and reliability of founder reported performance data. Third, it provides examples of specific measures with evidence that supports their relevance, availability, reliability, and validity. We believe this research can provide a base for future venture performance research. We hope that these findings will be used to help better our understanding of the dynamics impacting new venture performance and lead to improved managerial practice in emerging firms. On the basis of the results obtained from the study the researcher has the following recommendations both to the intending researcher on the same topic and to the tax authority and the owners of small businesses in order to improve on the performance of small businesses as a result of taxation. It is recommended to the tax authority that for any small business to perform well in the business field, there must be low or moderate rate of tax because low or moderate tax encourages efficiency and effectiveness of the small business enterprise and the shareholders, hence good performance with the low rate of taxes the small business enterprise get high profit, due to high sale, low price, high production, consequently, the business enterprises are able to expand or invest more since there is reduction in costs, hence this increases performance of small businesses for example reduction in cost of advertising, non-taxable benefits to employees and director's expense accounts may be met in the time by the business.
Description
A thesis presented to the College of Higher degrees and Research Kampala International University Kampala, Uganda in partial fulfillment of the requirement for the Award of a Degree of Masters of Business Administration
Keywords
Taxation and performance, Small scale business, Iganga District, Uganda