| dc.description.abstract | This study examined the effect of Taxation on the Performance of Selected Small and Medium
Scale Enterprises in Nakawa Division, Kampala District, with the aim of generating evidence to
inform tax policy design and compliance strategies. Specifically, the study was guided by four
objectives: (1) to assess the level of SME taxpayers’ knowledge of taxation; (2) to evaluate the
effect of tax rates on SME performance; (3) to determine the influence of tax incentives on SME
growth; and (4) to assess the relationship between tax filing requirements and SME performance.
A cross-sectional design was employed, integrating both qualitative and quantitative approaches
to enable triangulation of findings. The study sampled 278 SMEs using a combination of simple
random and purposive sampling techniques. Data were collected through structured questionnaires
and in-depth interviews, and analyzed using SPSS Version 27, applying both descriptive statistics
and Pearson correlation analysis. Findings indicated that while SMEs demonstrated moderate
awareness of taxation, significant knowledge gaps persisted, particularly regarding tax obligations
and incentive access. A statistically significant positive relationship was found between tax
incentives and SME performance (r = 0.375, p < 0.001), and tax rates also showed a notable
influence. Overall, the study revealed a moderate to strong correlation between key elements of
taxation and the performance of SMEs, suggesting that effective tax policies and improved
taxpayer education can positively impact SME growth and sustainability. The study recommends
that the Uganda Revenue Authority (URA), in collaboration with the Ministry of Finance, scale
up tax education campaigns targeting SMEs and implement a tiered tax incentive structure based
on enterprise growth stages. These interventions are essential to enhance compliance, reduce
business constraints, and promote long-term economic development within Uganda’s SME sector. | en_US |
