The Impact Of Taxes On The Performance Of Small Scale Business In Uganda, Case Study Kikuubo Lane Kampala City.

ABSTRACT

The study was about the impact of taxes on the performance of small business in Uganda

case of Kikuubo lane-Kampala city. Kikuuko lane was selected because it is the busiest

small business center with over 1000 traders. As regards the study 250 small business

firms were selected and this gives a fair representation of small business.

Many small business owners have not given greater attention to a wide range of taxes

levied on their businesses and the methods used by the tax authorities to collect taxes.

Suggestion and proposals have been raised as to how taxes levied on small businesses

affect their performance.

For that matter, the study aimed at establishing the impact of taxes on performance of

small scale business, the types of tax levied, customers response to products as price

changes due to taxes levied and to suggest how taxation policies can be improved to

favour small scale business in Kikuubo lane and Uganda at large.

Questionnaires were used as the basic research tool and sampling as a method of

research. The study included field research, library research and document analysis.

The study revealed that almost all small business firms pay taxes that is direct and

indirect taxes. The findings indicated that taxes have a great impact on the performance

of small business. Better performance is dependent on profitability. Higher taxes levied

lowers net profits hence poor performance by most small businesses in Uganda.

The study concluded with recommendations towards improving taxation policies in

Uganda for example taxes, should be collected during the period when the small business

firms are making profits; they should not be collected immediately after festival seasons

like Christmas.

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