Impact of Taxation on Performance of Small and Medium Enterprises in Kansanga, Makindye Division

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Kampala International University. College of Economics & Management
The general purpose of the study was to evaluate the impact of taxes on performance of small and medium business enterprises in Kansanga and the specific objectives were; to assess the performance of small scale business enterprises in Kansanga, to find out if tax payers are aware of all their tax obligations and policies and to find out problems affecting tax payers and their businesses in Kansanga The study revealed that taxes mainly affects the performance of Small and Medium Enterprises through lost sales during 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 SME5 that default on their tax obligation. Overall business performance was fair as most businesses could duly cover up their expenses, had enough stock, awareness of tax payers was poor and a number of problems were encountered. It can be concluded that taxes are major limitations to the growth and expansion of SMEs in Kansanga. This is because very little and sometimes nothing is left after covering expenses and tax to allow the expansion and growth of the existing SMEs. The findings further revealed that tax officials are inefficient, the mode of tax collection and assessment was un fair, taxes levied are unfriendly and also most of the respondents revealed they do not get assistance from the tax authorities. The study recommended that, URA should find a way of assessing the tax in that the SMEs should pay early in the financial year in order to give enough time to the businesses to pay their dues rather than make an assessment and demand for payment spontaneously, the tax authorities should introduce a scheme that allows tax payers to pay the tax obligation in the installments over a given period of time as opposed to lump sum at once and that URA should reach out and educate the business community about the different tax rates and mode of payment
Research Report Submitted to the College Of Economics And Management in Partial Fulfillment of the Requirements for the Award of a Bachelor of Business Administration of Kampala International University.
Taxation, Enterprises, Makindye Division, kampala