The Effects of Taxation on the Financial Performance of Small and Medium Enterprises in Nabuti Village Nsube Kauga Mukono

Abstract

The research looked at the effects of taxation on the financial performance of small and medium enterprise in Nabuti village Nsube-Kauga parish Mukono. It mainly explored the different types of taxes which involved income tax, value added tax and local taxes and it also looked at different objectives which included, To find out the effect of income tax on the financial performance of small and medium enterprise in Nabuti village, Nsube-Kauga Mukono, find out the effect of value added tax on the financial performance of small and medium enterprise in Nabuti village, Nsube-Kauga Mukono and To find out the effect of local taxes on the financial performance of small and medium enterprise in Nabuti village, Nsube-Kauga Mukono. The research used a descriptive research design and a random sampling technique to gather data from 52 small and medium enterprises by using these questionnaires, interviews and observations. The findings of the study showed that income tax had a great effect on the profits of small and medium enterprises in Nabuti village Nsube Kauga Mukono. The findings also showed that the cash flows of small and medium enterprises were being greatly affected by value added tax.The findings also show that local taxes greatly impacted on the financial stability of the small and medium enterprise in Nabuti village Nsube Kauga Mukono. The study then concluded that the taxes mentioned above negatively affected the financial performance of small and medium enterprises.