Income Tax Administration and Profitability of Small Scale Business Enterprises in Uganda a Case Study of Kampala Capital City.
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Date
2015-06
Authors
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Publisher
Kampala International University, College of Economics and Management Sciences .
Abstract
This study was to establish the relationship between income tax administration and profitability
of small-scale business enterprises in Kampala Capital City, Kampala district. The study aimed
at assessing the profitability of business enterprises in Kampala Capital City; 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 district. 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 catTy 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 small-scale businesses. There is
therefore need for more research on firm's management techniques, the role of bookkeeping and
profitability of small and mid-size enterprise.
Description
A research report submitted to the Collage of Economics and
Management in Partial Fulfillment for the Award of Bachelor in Business Administration of Kampala International University.
Keywords
Small Scale Business Enterprises, Income Tax Administration, Profitability, Kampala Capital City