Income tax administration and profitability of small scale business enterprises in Uganda: a case study of Kikuubo b. Kampala Central
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Date
2017-07
Authors
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Publisher
Kampala International University.College Of Economics and Management
Abstract
This study was to establish the relationship between income tax administration and
profitability of small-scale business enterprises in Kikuubo B. Kampala Central. The study
aimed at assessing the profitability of business enterprises in Kikuubo B. Kampala Central;
finding out if taxpayers are aware of all their tax obligations, know how income tax is
administered, policies and problems affecting them as well as their businesses.
The study was guided by the following research objectives; to establish how income tax
administration is administered and imposed on small-scale business enterprises, to assess the
profitability of small-scale business enterprises, to establish the relationship between income
tax administration and profitability of small-scale business enterprises in Uganda.
The study applied both qualitative and quantitative research designs where interviews and
Questionnaires were used. Data was collected from both primary and secondary sources. Data
was processed and analyzed using formal tables, pie charts, graphs, narrative text, and
correlation to find out the relationship between income tax administration and profitability of
small scale businesses. A total of 50 respondents were considered out of the entire population
in the Town Council.
The findings revealed that income tax administration is poor and this was shown in the
findings that indicated that the business community is not adequately sensitized, tax rates are
at times high and they are based on estimates. Tax rates do not take in to account the
circumstances in which small businesses operate, that has negatively affected the profitability
of the small scale businesses leading to low capital employed, high expenses incurred, low
sales made and the average amount of taxes paid annually being so high.
In conclusion, therefore, URA needs to carry out an extensive survey-based analysis of small
firms profit margins to determine presumptive tax rates, which will not affect the small
business earners.
The researcher therefore, recommended that, URA; should supply tax assessment forms in
time, intensify on the sensitization campaigns of the taxpayers, employ competent staff,
educate the business community about its different tax rates and introduce a scheme that
allows taxpayers to pay the tax obligation in installment to better the profitability of smallscale businesses. There is therefore need for more research on firms' management techniques,
the role of bookkeeping and profitability of small and mid-size enterprise.
Description
Research report submitted to the college of Economics and Management in partial fulfillment of the requirements for the a ward of Bachelors degree in Business Administration of Kampala International University
Keywords
Income, Tax, Administration, Profitability, Business, Enterprises, Uganda