Tax compliance and tax administration among SMEs.
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Date
2024-09-11
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Ucu
Abstract
This research focused on understanding the different taxes that small and medium-sized businesses
(SMEs) have to pay. It looks at various types of taxes, such as income tax, value-added tax (VAT), payroll
taxes, and local taxes. By explaining these tax types, the study helps us understand the complicated tax
rules that these businesses deal with. Knowing these tax requirements is important for understanding the
financial challenges and compliance issues that small and medium businesses face. The research also
looked at how SMEs in Uganda handle their tax responsibilities and what they think about different types
of taxes. The results show that all businesses agree that the turnover tax is very important, with everyone
giving it a high score and no disagreements, making it a key part of the tax system. VAT is also widely
accepted. However, Pay As You Earn (PAYE) and corporate tax are less popular.
The research showed that small and medium-sized businesses (SMEs) are more likely to follow tax rules
when they want to support public services and avoid legal problems. These two reasons were the most
important. However, worries about the government misusing money and the difficulty of filing taxes
greatly affect how well SMEs follow tax rules. This shows the need for more transparency, simpler tax
processes, and better communication from tax authorities.
Suggested improvements include better support and education on PAYE and corporate tax, making VAT
and local service tax rules easier to understand, offering tax incentives or benefits for SMEs, and
increasing transparency and efficiency in tax administration. Simplifying tax procedures and addressing
concerns about corruption are important for encouraging people to follow tax laws and trust the system.
These measures aim to create a more supportive and clear tax environment that helps SMEs meet their
tax obligations effectively.