The impact of taxation on the performance of small businesses:

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Kampala International University, College of Economics and Management
The purpose of this study was to investigate impact of taxation on the performance of small businesses in the Central Market of Mbarara District. Specific objectives of the study were to: describe the methods used in collection of the market dues in Mbarara central market; determine the tax payers' perception of the "faimess"/or the"unfaimess" of the tax collection system in Mbarara central market; and to find out ways in which government can come up with a good tax system that can attract business organizations to pay tax The methods used for data collection were questionnaires to traders and interviews with the employees in management positions in the market. The findings of the study discovered that the following are the major methods used in collection of the market dues: 50% of respondents agreed that that the method used to collect market dues is by imposing a daily rate determined by the collectors depending on the amount/value of the items brought for sale; and 87.5%) of respondents agreed that the Market places are s4pposed to be tendered out on the basis of a reserve price, based on an assessment of the revenue potential of the individual market The study recommended that: Build vertical accountability of the tax system: Since most Kenyans view payment of tax as a punishment rather than a duty, it is important to take into account the "taxpayer's voice" by building vertical accountability. The Kenya Revenue Authority should move away from using tax laws to "control and punish" but rather to "facilitate and ensure compliance". Priority should go towards espousing the participation and taxpayer ownership. Improve tax collection and administration: Tax collection and administration can be improved through measures such as; shifting towards an integrated tax payer registration system where a uniform Tax Identification Number (TIN) would apply regardless of whether a tax payer is registering for Personal Tax, Corporate Tax or VAT
A research report submitted to the school of business and management in partial fulfillment of the requirements for the award of the Degree of Bachelor of Business administration of Kampala International University
Taxation, Performance, Small businesses, Mbarara Central Market