The Effect of Tax on the Performance of Small and Medium Enterprises. Case Study: Biyinzika Poultry Farmers-Johnson Street Kampala

Abstract

The purpose of the research is to evaluate the effect of Taxes and performance of small and medium enterprises in Biyinzika. The specific objectives that is to establish the effect of tax assessment on the performance of small and medium enterprises, to evaluate the relationship between tax awareness and performance of small and medium enterprises and to assess the role of tax compliance on the performance of small and medium enterprises.

The researcher employed a case study design which was used to undertake the study with the help of qualitative approach, quantitative approach, and document review. The researcher had a sample size of 52 respondents drawn from the total number of 60 people of the entire population which comprises of managers or supervisors and employees. The researcher obtained primary data obtained through field survey as well as secondary data have been elicited through tabulation, interpretation, diagrammatic representation. These were supplemented by the statistical records and collected from the concerned departments or offices for evaluation. The researcher used questionnaires and interviews for collecting data from the field.

The data was about taxes and performance among Small and medium enterprises which were collected and analyzed using the statistical package for social scientists (SPSS) to generate the tables for which analysis and discussion were made.

The study revealed that taxes are positively and significantly related to performance of small and medium enterprises; and that the company had no updated information for tax purposes, tax officials were corrupt, disorganized system, concealment of information about tax potentials and lack of transparency of tax officials.

Recommendations included; tax authority should train staff and educate the business community about its different tax rates and mode of payment, for the tax payers the revenue authority should strengthen the appeal process that will help to build confidence among tax payers which will give motivation to the tax process.

The report concludes that taxes affect the performance of small and medium enterprises.

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