The Effects Of Taxation On Small Scale Enterprises, A Case Study Of Kampala Central Division

ABSTRACT

The study looked at the effects of taxation on small scale enterprises .11 was carried out in Kampala central division. Despite the special support by the government of Uganda in form of tax reforms , the business

community still worries about the reduction to the growth of small scale business. A combination of analytical and descriptive research &sign using Morgan formula were seen to be appropriate in which the sample size of 97 from a target population of 130 was purposively

selected from small scale business for the study.

Both primary and secondary sources of data were used as results analyzed basing on the

questionnaires, observation and interview guide.

The study shows that there is a weak positive relationship between administration of local

taxation collection and service delivery. This implies that a change in administration of local

taxation collection would slightly affect the service delivered. In conclusion, the division in a bid to ensure service accessibility to users should redistribute

service centers in an equal manner to all remote areas of the division. More to that, these service

centers should be stocked with well trained and competent staff and other necessary

requirements. The division’s administrators through an established technical planning committee should prioritize spending behaviors on services especially from the most argent to the least argent.

TABLE OF CONTENTS

DECLARATION.

APPROVAL ii

DEDICATION iii

ACKNOWLEDGEMENT iv

ABSTRACT

CHAPTER ONE 1

1.0 Introduction I

1.1 Background of the Study 1

1.2 Problem Statement 2

1.3. General Objectives of the Study 3

1.3.1 Specific Objective of the Study 3

1.4 Research Questioi~s 3

1.5 Scope of the study 3

1.5.1 Subject Scope 3

1.5.2 Geographical Scope and Time 4

1.5.3 Time Scope 4

1.6 Significances of the Study 4

CHAPTER TWO 5

LITERATURE REVIEW 5

2.0 Introduction 5

2.1 Definition of Key Concepts 9

2.1.1 Tax

2.1.2 Taxatioi~ 9

2.1.3 Income Tax 9

2.1.4 Small Scale Enterprises (S5E’S) 9

2.2 Scope of Small Scale Enterprises 10

2.3 Features of a Good Tax Structure 12

2.4 Purpose of Taxation 14

2.5 Success of Business 15

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2.6 How Taxes Affects the Success of Business.17

CHApTER THREE 19

RESEARCH METHODOLOGY 19

3.0 Introduction 19

3.1 Research Design 19

3.2 Research Population 19

3.3 Sample Size 19

3. 1 Research Procedure 20

3.4 Data Collection and Techniques used 20

3.5 Research Methods 20

3.8 Limitation of the Study 21

CHAPTER FOUR 22

PRESENTATION AND ANALYSIS OF RESEARCH FINDINGS 22

4.0 Introduction 22

4.1 General response 22

4.2 Rio data 22

4.2.1 Gender 22

4.2.2 Age of the respondents 23

4.2.3 Education levels of the respondents 23

4.2.4 The Length of time of stay of respondents 24

4.2.5 The marital status of respondents 24

4.3 Local Taxation 25

4.3.1 The length of time of paying taxes 25

4.3.2 Findings on Taxation collection trends 26

4.3.3 Findings on whether Taxation is collected in time 26

4.3.4 Findings on whether tax levied is fair 27

4.3.5 Findings on whether Kampala Central Division gets other Taxations 27

4.4 Service delivery 28

4.4.1 Findings on whether services are easily accessed 28

4.4.2 Findings on the manner in which services are provided 28

4.4.3. Findings on whether the services provided are consistently supplied 29

4.4.4 Findings on availability of relevant information 29

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4.4.5 Findings on whether services provided have no effects on human life 30

4.4.6 Findings on whether services are provided by competent and qualified staff 30

4.5 Findings on the relationship between Taxation co1lect~on and service delivery 31

4.5.1 Findings on factors affecting service delivery 31

4.5.2 Findings on whether Good Taxation collection leads to improvement of service 32

4.5.3 Findings on whether there is a relationship between Taxation administration 33

CHAPTER FIVE 34

DISCUSSION, CONCLUSION AND RECOMMENDATIONS 34

5.0 Introductions 34

5.1 Rio-Data 34

5.1.1 Gender 34

5.1.2 Age of Respondents 34

5.1.3 Education levels of the respondents 34

5.1.4 The Len~h of time of stay of respondents 35

5.1.5 The marital status of respondents 35

5.2 Administration of local Taxation collection in Kampala Central Division 35

5.2.1 Findings on Taxation collection trends 35

5.2.2 Findings on whether Taxation is collected in time 35

5.2.3 Findings on whether tax levied is fair 36

5.2.4 Findings on whether Kampala Central Division gets other revenue sources other than 36

5.3 Service Delivery in Kampala Central Division 36

5.3. 1 Findings on whether services are easily accessed 36

5.3.2 Findings on whether the manner in which services are provided involves a wide range 36

5.3.3 Findings on whether the services provided are consistently supplied 37

5.3.4 Findings on availability of relevant information 37

5.3.5 Findings on whether services provided have no effects on human life 37

5.3.6 Findings on whether services are provided by competent and qualified staff 37

5.4 Relationship between Taxation collection and service delive~i 37

5.4.1 Findings on factors affecting service delivery 38

5.4.2 Findings on whether Good Taxation collection leads to improvement of service 38

5.4.3 Local Taxation collection and service delivery in Kampala Central Division 38

5.5 Recommendations