Effects Of Taxation On Business Activities In South Sudan Case Study: Eastern Equatoria State (Souht Sudan)

ABSTRACT This research was based on the effects of taxation on business activities in Southern Sudan and the case study was Eastern Equatoria State. I was interested in this Topic because taxation system in Southern Sudan is still very weak in areas such as harmonization, coordination and capacity of South Sudan National Revenue Authority staff. South Sudan National Revenue Authority is adopting progressive tax system while the states use both progressive and proportional taxation systems and both the national government and the states have no proper modalities in administering taxation in the country. Taxes are still being paid on cash basis to the tax collectors and sometimes government receipts are not given to the tax payers and some tax payers do not pay taxes because there are no proper mechanisms at present to check them. Smuggling, corruption and bribing are other major problems contributing to low revenue from taxes to government, although business people keep complaining of high taxes. The major methods I used in data collection included sample selection, interviews and self administered questionnaires, and all these methods have been categorized on the questions set. The major findings obtained indicated that 80% of the respondents were in the opinion that the government of Southern Sudan should come up with a strategy of harmonizing and coordinating taxes in the country. However ,Adam Smith, one of the scholars continue to urge that taxation prindple should be based on social justice, convenience, and the burden of paying taxes should be distributed to tax payers according to ability to pay approach, and the tax payers must be certain of the amount to pay. Adam Smith further stated that the cost of collecting taxes should not exceed expected revenue to finance public wants. Some recommendations provided in this report include further research on the administrative mechanisms of the taxation system in South Sudan. Secondly, a research on offences and penalties on the followings: e Unpaid interest on tax • Offences by companies • Compounding offences • Penal tax

TABLE OF CONTENT

DECLARATION ii

APPROVAL

DEDICATION iv

ACKNOWLEDGEMENT

TABLE OF CONTENT vi

LIST OF TABLES ix

ABSTRACT x

CHAPTER ONE 1

1.1 Introduction and Background of the Study 1

1.2 Problem Statement 2

1.3 Purpose of the Study 4

1,4 Objective of the Study 4

1.5 Research Questions 4

1.6 Area of the Study 4

1.7 Scope of the Study 5

1.8 Significance of the Study 5

CHAPTERTWO 6

LITERATURE REVIEW 6
 2.1 Introduction 6

2.2 Taxation Definition 6

2.3 Objectives of Taxation 7

2.4 Types of Taxes 8

2.5 Classification of Tax System 12

2.6 Principles of Taxation 13

2.7 Tax Compliance 14

2.8 Smuggling and its Effects 15

CHAPTER THREE 17

METHODOLOGY 17

3.1 Research Design 17 

3.2 The Study population .17

3.3 Sampling Method 17

3.4 Data Collection

3.5 Source of the Data 18

3.6 Data Analysis 18

3.7 Limitation of the Study 18

CHAPTER FOUR 19

DATA PRESENTATION, INTERPRETATION, ANALYSIS AND DISCUSSION OF THE RESEARCH FINDINGS 19

4.0 Introduction 19

4.1 Background information of the respondents 19

4.2 Active taxes in South Sudan Government 20

4.3 Taxes in South Sudan before independence 20

4.4 Taxes in South Sudan after independence 21

4.5 Taxes administered by the State Government 22

4.6 Impacts of taxation on business activities in South Sudan 23

4.7 Impacts of taxation on consumers 24

4.8 Causes of tax evasion and avoidance 25

4.9 Challenges faced by South Sudan national revenue authority 25

CHAPTER FIVE 27

SUMMARY, RECOMMENDATIONS AND CONCLUSIONS...27 5.1 Introduction 27

5.2 Summary of the Findings 27

5.3 Recommendations 28

5.4 Conclusion 29

5.5 Further research areas 29

5.6 Terms Used in Taxation 29

REFERENCES 31

APPENDICES 32

APPENDIX A: RESEARCH BUDGET 32

APPENDIX B: TIME FRAME 33

APPENDIX C: INTRODUCTORY LETTER .34

APPENDIX D: RESEARCH INSTRUMENTS 35 

QUESTIONAIRE 35 2. INTERVIEW GUIDE 41