Taxation Challenges Faced By Small Scale Businesses in Uganda: A Case of Kawempe Division

Abstract

The study set out to examine the taxation challenges faced by Small Scale Businesses in Uganda. The study took a case study of Kawempe Division in Kampala District. Specifically, the study examined the challenges faced by SSBs, challenges faced by government in collecting taxes from SSBs and suggested strategies that government can collect taxes from SSBs with less burden. The study adopted a cross sectional case study design that was both quantitative and qualitative in approach. The study took a sample of 50 SSBs which were selected using simple random sampling. Data were collected using semi structured questionnaire. The study established that the major challenges faced by SSBs in paying taxes are lack of awareness on the nature tax they pay, the frequency of tax payment and poor administration. Challenges to government in collecting tax from SBBs include lack of sensitization of SSBs about tax payment, corruption by tax collectors and poor approaches to taxing SSBs. The study concluded that the ignorance about the tax paid and poor approach or methods of taxation are responsible for the tax burden to SMEs which account for the failure. It was recommended that tax SSBs should be sensitized and educated about the nature of the taxes they pay so that they can plan for such taxes while the frequency of tax payment should be revised to less the burden on SSBs tax payers which will also lead to convenience of tax collection from these businesses by government