Impact of Tax on Performance of Small Medium Enterprises in Uganda: Case Study of Mulago Washing Bay
Abstract
The main objective of this research was to find the impact of tax on the performance of SMEs in
Uganda. The study used a cross section study design and it used primary data collected from
Mulago as the case study using a questionnaire as a tool for data collection. Data was analyzed at
three levels “univariate analysis where percentage distribution tables were used, bivariate where
Pearson‟s chi-square test was used and multivariate which aimed at establishing the determinants
using odd ratio”.
Findings of the study indicated that 56.58% their washing bays performed poorly since they
earned less than 50,000shs per day, 81.58% and the biggest proportion of the respondents
(46.05%) was in the age group of 20-30 years, 48.68% were currently cohabiting, 48.68% of the
respondents acquired no education level, 52.63% agreed that their washing bays were assessed
for tax and 64.47% of the respondents kept tax recodes for their washing bays. Results also
indicated 47.37% agreed that tax has contributed to the development of infrastructures in the
country, 47.37% were uncertain whether tax contributes to health of the people in the country,
43.42% agreed that tax contributes to market widening, 42.11% disagreed of tax contributing to
their economic, 69.74% agreed that tax has affected the performance of their washing bays and
67.11% were aware of tax laws and regulations. From bivariate analysis results indicated that
effect of a tax, respondent paying tax and awareness of tax laws and regulation were significantly
associated with the performance of SMEs in Mulago as chi-square p-value was less than 0.05 and
from the logistic regression it can be concluded that none of the study variable was determinate
of performance of SMEs in Mulago even the tax which was expected.
Their for public awareness on laws and regulation of tax, reduction of tax rate and even use of
progressive tax policies in the country are recommended for this study result.