Effects of taxes on the growth of small scale businesses in Uganda case study: Namuwongo Sub-Country
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The study was carried out to find out the effects of taxes on the growth of small scale business enterprises in Uganda (SSBs), taking a case study of Namuwongo Town Council. The study aimed at assessing the growth of business enterprises in Namuwongo Town Council, finding out if tax payers are aware of all their tax obligations, policies and problems affecting them as well as their businesses. The study applied both qualitative and quantitative research designs where questionnaires were used. Data was collected from primary sources. Data was processed and analyzed using formal tables, narrative text, and correlation to find out the relationship between the effects of taxes on the growth of small scale businesses. A total of 100 respondents were considered out of the entire population in the Town Council. The findings indicated that the growth of SSBs is affected by stock levels, capital employed, daily sales and the average amount of taxes paid annually. Most business owners are aware of taxes paid, uncertain of the mode of assessment and little assistance is given as regards tax awareness. The findings revealed the problems faced by the tax payers as regards mode of assessment, collection and tax collectors, inefficiency by tax collectors, loss of equipment, loss of sales and loss of stock as a result of taxes. Recommendations on effects of taxes included: improvement on the method of collecting taxes, educating the business community about the different tax rates, introducing a scheme that allows tax payers to pay the tax obligation in installments, and finding a way of assessing the tax the SSBs should pay early in the financial year in order to give enough time to the business to pay up their duties rather than make an assessment and demand for payment spontaneously.