Effect of Value Added Tax on the Performance of Small Scale Business in Jinja District

ABSTRACT

The study was to establish the effects ofV AT on the performance of small scale business in Nappier market and it was subjected to a number of objectives which were; to establish the benefits and challenges from VAT, to investigate the fat ors that determine the performance of small scale business and establishing alternative ways to improve VAT collection. The study focused on the small scale traders in Nappier market to determine how VAT affects their performance in relation to the other factors on how to improve upon their businesses. A descriptive research design was undertaken with a random sample of 60 respondents and data was collected using questionnaires, observations and interviewing. The findings of the study show that there are a number of effects of VAT on performance among of which includes general increase in prices of goods, economic slow downs to mention but a few. Some of the measures that were given to improve on their performance included sensitization, financial assistance, training and proper monitoring of human resources and adjustments in administration. Basing on the research findings, the government authorities were recommended to reduce the VAT rate and this should be dynamic depending on the economic conditions prevailing and what has been to economic conditions prevailing and what has been produced. Not only should this but financial assistance couped with training of small business holders and business advice be extended respectively.

TABLE OF CONTENTS

Declaration .......................................................................................... ii

Approval ............................................................................................ iii

Dedication ........................................................................................... iv

Acknowledgement .................................................................................. v

List of abbreviations ............................................................................... vi

Table of contents .................................................................................. vii

List of tables ........................................................................................ x

Abstract ............................................................................................. xi

CHAPTER ONE ................................................................................. I

INTRODUCTION ................................................................................. !

!.1 Background of the study ........................................................................ I

1.2 Statement of the problem ..................................................................... .3

1.3 Purpose of the study ............................................................................ 3

1.4 Objectives of the study ....................................................................... .4

1.5 Research questions ............................................................................. .4

1.6 Scope of the study ............................................................................. .4

!.7 Types of small business enterprises in nappier market as area of study ................. 5

I. 8 Significance of the study ....................................................................... 5

1.9 Conceptual Framework ........................................................................ 6

CHAPTER TWO ................................................................................. 7

LITERATURE REVIEW ......................................................................... 7

2.0 Introduction .................................................................................... 7

2.1 Origin .......................................................................................... 7

2.2 Definition of VAT ........................................................................... 7

2.3 Benefits and Challenges of VAT ............................................................ 8

2.4 Advantages and Disadvantages of VAT to Small Scale Traders in Napier ............ 9

2.5 Ways to improve Vat Collection ............................................................ 1 0

CHAPTER THREE ............................................................................. II

METHODOLOGY .............................................................................. II

3.0 Introduction ................................................................................. II

3.1 Research Design ............................................................................. 11

3.2 Sample size and selection ................................................................. .II

3.3 Instruments ................................................................................... 12

3.4 Procedure .................................................................................... 14

3.5 Data Presentation ............................................................................ 14

3.6 Data analysis ................................................................................. 14

3.7 Limitation of the study ...................................................................... 15

CHAPTER FOUR .............................................................................. 16

PRESENTATION AND INTERPRETATION OFTHERESEARCHFINDINGS ...... 16

4.1 Introduction ................................................................................... 16

4.2. Identification and classification of information .......................................... 16

4.3 The meaning of concept of VAT .......................................................... 18

4.4 Responses on whether VAT has effects on the performance of the small scale businesses in Nappier market 

4.5 The relationship between VAT performance of small scale business performance and VAT 

4.6 Suggestion on the ways to improve the performance of small scale business ....... 21

4.7 Response on suggestion of factors that affect performance of small scale businesses

CHAPTER FIVE ................................................................................. 23

SUMMARY, CONCLUSION AND RECOMMENDATIONS ............................... 23

5.0 Introduction ................................................................................... 23

5 .I Summary of the research finding .......................................................... 23

5.2 Factors that effect performance of the small scale ....................................... 23

5.3 Conclusion .................................................................................... 24

5.4 Recommendations ........................................................................... 24

5.5 Areas of future research ..................................................................... 25

REFERENCES ................................................................................... 26

APPENDIX 1 ..................................................................................... 27