Corporate income tax and financial performance of commercial banks in Uganda: a case study of centenary rural development bank, Ishaka Branch Bushenyi District
Loading...
Date
2015
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Kampala International University(KIU)
Abstract
The study was carried out on corporate income tax and financial performance of commercial
Banks in Uganda, a case study of Centenary Rural Development Bank lshaka, The research was
conducted basing on two study variables: corporate income tax as an independent variable and
financial performance was the dependent variable, The study was guided by the following
objectives; to evaluate the effects of corporate income tax, level of financial performance and
find out the relationship between corporate income tax and financial performance in Centenary
Rural Development Bank,
Descriptive research design was used during the study because the researcher relied on the
respondents' views and a case of Centenary bank lshaka branch was used to represent
commercial banks and the findings, conclusions and recommendations were generalized to all
commercial banks in Uganda,
The researcher had a target population of 30228 respondents out of which a sample of 395
respondents was selected using Sloven's formula, The data was collected using questionnaire
and interview guide, Both purposive and stratified sampling techniques were used, Cross
sectional research design was used in the study,
Data was analyzed using SPSS and data presented m the in tables using frequencies and
percentages. Pearson correlation coefficient was used to determine the relationship between
corporate income tax and financial performance.
The findings of the study revealed that corporate income tax reduces retained earnings, share
price and loan interest income. The major determinants of bank performance were capital,
liquidity and management. Corporate income tax showed an inverse relationship with financial
performance. The study was based on Equity Theory. It was found that commercial banks only
pay corporate income tax on their profits, not on their revenues. If a bank is just breaking even
and doesn't have any profit left, then corporate income tax is not paid.
The researcher based on the study findings and recommended that Centenary Rural Development
Bank should employ the services of corporate income tax experts to aid in corporate income tax
management and also should plan additional ways to increase its profitability.
Description
Keywords
Corporate Income Tax, Performance of Commercial Banks, Uganda, Centenary Bank