| dc.description.abstract | This study was to establish the Income tax administration and profitability of Small Scale Medium
Enterprises: A case study selected SEMS Kamukuzi Town Council. The study aimed at assessing the
profitability of Small Scale Business Enterprises in Kamukuzi Town Council; finding out if taxpayers are
aware of all their tax obligations, know how income tax is administered, policies and problems affecting
them as well as their businesses. The study was guided by the following research objectives; to evaluate
the effectiveness of the income tax administration of the selected Small Scale Business in Kamukuzi
Town Council, to examine the profitability of the selected Small -Scale Business Enterprises in Kamukuzi
Town Council and to establish the relationship between income tax administration and profitability of
small-scale business enterprises in Uganda.
The study applied both qualitative and quantitative research designs where interviews and Questionnaires
were used. Data was collected from both primary and secondary sources. Data was processed and
analyzed using formal tables, and correlation to find out the relationship between income tax
administration and profitability of small scale businesses. Total of148 respondents were considered out of
the entire population in the selected SMEs in Kamukuzi Town Council. The findings revealed that income
tax administration is poor and this was shown in the findings that indicated that the business community
is not adequately sensitized, tax rates are at times high and they are based on estimates. Tax rates do not
take in to account the circumstances in which small businesses operate, that has negatively affected the
profitability of the small scale businesses leading to low capital employed, high expenses incurred, low
sales made and the average amount of taxes paid annually being so high.
In conclusion, therefore, URA needs to carry out an extensive survey-based analysis of small
firms‟ profit margins to determine presumptive tax rates, which will not affect the small business
earners. The researcher therefore, recommended that, URA; should supply tax assessment forms
in time, intensify on the sensitization campaigns of the taxpayers, employ competent staff,
educate the business community about its different tax rates and introduce a scheme that allows
taxpayers to pay the tax obligation in installment to better the profitability of small-scale
businesses. There is therefore need for more research on firms‟ management techniques, the role
of bookkeeping and profitability of small and mid-size enterprise | en_US |
