The impact of taxes and licenses on performance of small and medium enterprises in Masaka District
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The study was carried out to establish the impact of taxes and licenses on performance of small and medium enterprises in Masaka District taking a case study of Nyendo market area. Specific objectives of this study were to: to examine the effect of licenses on the performance of small and medium enterprises in Masaka District, to determine the effect of capital financing to the performance of small and medium enterprises in Masaka District, to examine the effect of taxation on the growth of small and medium enterprises in Masaka District. The study applied both qualitative and quantitative research designs where interviews and questionnaires were used. Data was collected from primary sources entirely where a sample of 50 respondents was selected using the simple random sampling technique. Data was processed and analyzed using summary tables, pie charts, graphs and narrative text. The findings indicated that Annual taxes and licenses paid have an impact on performance of small and medium scale enterprises. Most business owners are aware of all the tax and license obligations and policies and the most SMEs in Masaka District have a capital base less than 0.5m on average with a fair annual performance. It’s recommended that assessment of average daily sales of SMEs before imposing particular license fees or placing them in a particular tax bracket should be done since licenses and taxes have an impact on average daily sales, revision of tax rates to make them favorable for SMEs and briefing of SME owners on tax policies and new rates through workshops.