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| Taxation and the Development of Small Businesses in Uganda, a Case Study of Iganga District
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Batuka Ramadhan, Irumba Alex, Dr Ariyo Gracious Kazaara, Kamugisha Nelson, Tukamuhebwa Deus, Twinamatsiko Pascal
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Abstract:
The following objectives served as the study's principles as it examined the relationship between tax compliance and the growth of small businesses in Iganga district, the relationship between tax rates and the growth of small businesses in Iganga district, and the relationship between tax incentives and the growth of small businesses in Uganda. According to research, a one percent increase in tax incentives would, on average, result in a 0.627 increase in the growth of small firms. We conclude that there is a relationship between tax incentives and the growth of small businesses because this was statistically significant by the 95% confidence interval and the p-value (0.023) is less than 0.05. Keeping other variables remain constant, a one percent increase in tax compliance would typically result in a 0.171 increase in the growth of small businesses. As a result, we draw the conclusion that there is a relationship between tax compliance and the growth of business. As a result, the null hypothesis is rejected, and the performance of small businesses is characterized as: Performance of small businesses= 0.627+ 0.459 Dtaxin + 0.311 Dtaxra +0.171 Dtaxcomp +Ui. This was statistically significant using the 95% confidence interval. The R-squared value (0.687) is higher than the adjusted R squared value and this shows that it's a good fit. Since F-computed (34.574) is greater than F-tabulated (0.00), we reject the null hypothesis and conclude that the dependent variable has a significant effect on the independent variables at 95% level of significance. The study recommends the following: Tax compliance and the performance of Small businesses. The study revealed that, in order to improve the efficiency of small businesses in Similar to this, the results of the interviews revealed that because of tax incentives, businesses have benefitted from tax exemptions like the Withholding Tax exemption and have been given a tax exemption certificate by the URA since such businesses have a solid record of timely income taxes. This has reduced the tax burden on these companies, allowing them to reinvest and grow. hence improving the performance and prosperity of Uganda's small businesses.
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