Taxation and Performance of Small Scale Businesses: A Case Study of Nakasero Market Kampala District
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Date
2012-04
Authors
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Journal ISSN
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Publisher
Kampala International University, College of Economics and Management
Abstract
The study sought to establish the impact of taxation on the performance of
small scale businesses in Uganda with a case study of Nakasero market and
was driven by mainly three objectives. These objectives include; the need to
examine the impact of taxation on the performance of small scale businesses
in Kampala district, the need to establish the relationship between taxation
and the performance of small scale businesses, and the third objective is to
examine the consequences of taxation on the performance of small scale
businesses.
To achieve these objectives, the researcher sampled twenty (30) respondents
from Nakasero market. The study utilized qualitative and quantitative
research methods; three data collection instruments were used, structured
interview guides and questionnaires and the collected data was presented in
table form and analyzed statistically to decipher findings.
The researcher was guided by three research questions; the first research
question sought to find out the impact of taxation on the performance of
small scale businesses and the research revealed that there are so many
positive and negative impacts of taxation on the performance small scale
businesses.
The second research question sought to find out the relationship between
taxation and the performance of the small scale businesses and the findings
revealed that; there is great relationship between the two in a way that high
taxes reduce the profits and performance of small scale businesses.
The third research question therefore sought to find out the consequences of
taxation on the performance of small scale businesses and the findings
revealed that; taxation has both positive and negative impacts on the
performance of these small scale businesses. That is to say, when high taxes
are charged on small scale businesses that are financially weak, their
performance is reduced but when small scale businesses are charged lower
taxes, their performance will greatly improve since they will have adequate
profits to plough back to the business.
In summary therefore, the researcher concluded that taxation can be used
to control the performance of the economy in a way that high taxes can be
used to control the consumption of harmful products such as opium,
stabilize the economy during the time of economic stability and so on.
On the other hand, the researcher identified that poor taxation policy has
numerous impacts on the performance of small scale businesses. This is in
way that when those small scale businesses that a financially unstable are
charged high incomes, it may result into their collapse or poor performance.
On the above basis the researcher recommends the corrective measures,
steps and procedures of taxation such as fiscal policies, monetary policies
among others so as to achieve satisfactory results by the owners of small
scale businesses in Uganda most especially those trading at Nakasero
market.
The information obtained through observation of the traders' activities and
other documents, questionnaires, interviews and focus group discussions
shows control procedures laid down by the management are adhered to, to a
certain extent, however, some weaknesses distort the process and
procedures but not to the extent of disqualifying the control in place so as to
realize the positive impact of taxation on the performance of small scale
businesses.
Description
Research Dissertation Submitted to Kampala International University College of Applied Economics and Management Science in Partial Fulfillment of the Requirement for the Award of the Degree of Bachelor of Business Administration
Keywords
Taxation, Small Scale Businesses, Nakasero Market Kampala District