The effect of withholding tax on the level of revenue of an economy a case study of Uganda revenue authority katwe makindye division Kampala Uganda:
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Date
2019-09
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Kampala International University, College of Economics and Management.
Abstract
The study was conducted from Uganda Revenue Authority Katwe branch in Makindye division
Kampala Uganda and it was about the e/f~ct of withholding tax on the level of revenue of an
economy. Three specific research ,~ objectives were developed and these were; To identifj the
dif/~rent types ofwithholding tax imposed ii’i Uganda,’ To inv~estigate on the effi~ct ofwithholding
tax on the level of revenue of Uganda and To examine the challenges fitced by URA while
administering withholding tax. The research design was both Quantitative and qualitative
research designs .The target population/or this study comprised of a total 0/43 and a sample of
40 respondents was considered using the Sloven ‘s jörmula, the sources of data were Primary
data and Secondary Data which were collected using the Questionnaires.
Findings on the fIrst objective showed that withholding tax on Employment Income is one of the
types of withholding taxes administered by URA basing on the response that those who
Disagreed were 3(7.5%,) which was lesser than those who agreed 18(45%,). According to table 6
above, withholding tax on professional fees is administered is administered basing on the
re~sponse that those who Disagreed were 3(7.5%,) which was lesser than those who agreed
23(575%,). According to table 6 above, withholding Tax on winnings of sports or pool Betting
basing on the response which showed that those who Disagreed were 3(7.5%,) which was lesser
than those who agreed given by 18(45,0%) According to table 8 above, Withholding Tax on
goods’ and services was administered basing on the response which showed that those who
Disagreed were 3(7.5%,.) which was lesser than those who agreed given by 16(40.0%).
Findings on the second objective shoed that there was a significant effect of withholding lax on
revenue For example the response on the statement that,’ Withholding tax may influence
economic growth (revenue,) by af/i~cting human capital investments was (3.85,), Higher
withholding taxes, lower net reiuri~, increase production costs and lower efficiency was (3.82,),
Withholding tax on agricultural supplies and Withholding tax on payments of commission to
mobile money dealers may a,fj~ct entrepreneurial activity was (3.88,), The larger the fax wedge is
between being successful and unsuccessful the lower is the amount of’ risk taking (3. 78,) and
finally the re.sponse on Taxation of’ dividends may reduce available new capital and harm firm
start-ups jar those without access to international was (4.05). All the results showed a very high
response as shown in the interpretation table 11 above. Therejöre it implies that withholding tax
has got a very significant impact on the level ofrevenue ofthe economy
Findings on the third objective showed that there was Lack ofIntegrated Business Operations as
one of the major challenges faced by URA, Poor Invoicing Procedures was also among the
biggest challenges and Administrative Burden Inhibits Proper Documentation n/Paper Trails,
The study recommended that Uganda revenue authority should establish public lectures to
people/citizens of’ Uganda to teach and train them about the propel’ financial management
plvctices in order to mitigate the challenges flice or met while dealing with clieni.s’ upon
administering withholding taxes, The study recommended that Uganda revenue authority should
create public awareness about the importance ofpaying taxes and also inform them about the
consequences and repercussions of’lax evasion and/or avoidance. The study further recommends
that the authority should ensure that officers that are meant to handle the activity n/withholding
taxes are well facilitated and they ,should in reasonable number to handle a specific number of
clients. This helps the authority to keep track n/services ren~lered by officers and also mitigates
negligence by the agents.
Description
a research report submitted to the college of economics and management in partial fulfillment of the award of bachelor’s degree in business administration (accounting and finance) of Kampala international university.
Keywords
holding tax, revenue, economy, Uganda revenue authority