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| Municipal Taxes and the Growth Of Micro and Small-Scale Enterprises in Kabale Municipality, Kabale District
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Lillian Ntakirutimana, Dr. Gracious Ariyo Kazaara (PhD), Moses Ntirandekura
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Abstract:
The study examined the relationship between municipal taxes and the growth of Micro and small scale enterprises in Kabale Municipality. The study was guided by the objectives which were; to establish the relationship between trade licensing and the growth of micro and small scale enterprises in Kabale Municipality, to investigate the relationship between local hotel tax on the growth of micro and small scale enterprises in Kabale Municipality, to assess the relationship between market fees and the growth of micro and small scale and enterprises in Kabale Municipality and to identify the relationship between property tax and growth of Micro and small scale and enterprises in Kabale Municipality. The study used a descriptive research design with pragmatic approach and a sample size of 344 was used selected using simple random and purposive sampling techniques. Data collection for this study was done using questionnaires and interview guide for both quantitative and qualitative data respectively. Data analysis was done using descriptive and inferential statistics with the use of Statistical Packages for social Sciences. The study determined the relationship between trade licensing and the growth of micro and small scale enterprises and the findings revealed a substantial positive association between trade licensing and growth of micro and small enterprises as indicated by a correlation coefficient of r=.653** and a p-value of (0.000). The study findings demonstrated that the hotel tax significantly influences the growth of micro and small scale enterprises in Kabale Municipality since the p-value (.000) is smaller than the significance level. The correlation coefficient is (.675**) shows a moderately positive association between hotel tax and growth of micro and small scale enterprises. Therefore, based on the findings, hotel tax has a statistically significant moderate beneficial impact on the business growth of micro and small scale enterprises. The results indicated that shows a moderate positive connection between market fees and growth of micro and small scale enterprises as shown by a Pearson correlation coefficient (r) is .579**with a p-value of .000.. The inference is that market fees strongly affect the growth of micro and small scale enterprises in Kabale Municipality. The findings indicated low positive relationship between property tax and growth of micro and small scale enterprises in Kabale Municipality. This indicated by positive results of Pearson Correlation, where r = .335, p<.01. Therefore, Kabale Municipality should always charge property tax but ensuring that it is not too much to cause decline in the growth of the enterprises. The study recommended that micro and small scale enterprises should pay license so that they are legally allowed to operate their businesses without interference and also creating a wider market for the products since they can be sold freely anywhere and generate profit. The government should reduce local hotel tax to ensure that the burden of paying is not much felt by the clients. In order to avoid a high tax burden and to ensure that small businesses have enough disposable income to continue operating, the taxable capacity of small businesses should be assessed..The study recommended that property tax should be kept low to avoid increase of rent fees to be paid by tenants because increase in the tax might constrain tenants leading to failure to pay which will affect growth of the enterprises.
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