ABSTRACT This study targeted establishing the effects of tax administration on the performance of medium and small scale enterprises with a case study of Lira Main Market - Lira Municipality. The objectives of the study included; establishing the performance levels of medium and small scale enterprises, examining the nature of tax administration process imposed on the medium and small scale enterprises and to determine the relationship between tax administration and performance levels in medium and small scale enterprises. The researcher adopted a blend of cross sectional and descriptive research designs. The respondents were selected by using stratified and random sampling techniques. A research questionnaire to examine the effects of tax administration was tested for validity and reliability and administered to collect primary data while interviews were used face - to ~ face. The researcher came up with recommendation on the final report.
TABLE OF CONTENTS
TITLE PAGE .............................................................................. .
MAP OF UGANDA SHOWING LIRA DISTRICT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
MAP OF LIRA DISTRICT SHOWING THE STUDY AREA . . . . . . . . . . . . . . . . . . . . . iii
DECLARATION........................................................................... iv
APPROVAL................................................................................ V
DEDICATION . . . .. . . .. .. . . . .. . . . . . ... . . . . . . ... . . . . . . .......... .. . . . ... . . . . . . . . . ... . . . .. .. VI
ACKNOWLEDGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
TABLE OF CONTENTS.................................................................. viii
LIST OF TABLES......................................................................... XI
ABBREVIATIONS . .. ... . . . . . . ... . .. . . . . .. . . . . . . . . . ... . .. . . . . . . . . . .. . . . . . . . . . . ..... .. . . .. Xll
LIST OF APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. Xlll
CONCEPTUAL FRAME WORK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . XIV
ABSTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... xv
CHAPTER ONE
1.0 INTRODUCTION................................................................. 1
I.I BACKGROUND TO THE STUDY............................................ 1
1.2 STATEMENT OF THE PROBLEM........................................... 2
1.3 PURPOSE OF THE STUDY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 2
1.4 OBJECTIVES OF THE STUDY............................................... 3
1.5 RESEARCH QUESTIONS..................................................... 3
1.6 TIME PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7 SCOPE OF THE STUDY....................................................... 4
1.8 SIGNIFICANCE OF THE STUDY............................................ 4
1.9 HYPOTHESIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
CHAPTER TWO
LITERATURE REVIEW
2.0 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 5
2.1 CONCEPTUALIZATION AND OPERATIONALIZATION AND
STUDY VARIABLES ............................................................ 5
Vlll
2.2 TAXATION AUTHORITY...................................................... 5
2.2.1 OBJECTIVES OF TAXATION................................................. 7
2.2.2 PRINCIPLES/ CANONS OF TAXATION.................................. 8
2.3.1 TAX ADMINISTRATION....................................................... 10
2.3.2 IMPORTANCE OF TAX ADMINISTRATION.............................. 12
2.4 MEDIUM AND SMALL SCALE ENTERPRISES ........................... 13
2.5 PERFORMANCE OF MEDIUM AND SMALL SCALE
ENTERPRISES.................................................................... 14
2.6 PERFORMANCE OF SMALL AND MEDIUM SCALE
ENTERPRISES IN LIRA MAIN MARKET................................. 15
2.7 RELATIONSHIP BETWEEN TAX ADMINISTRATION AND
PERFORMANCE OF MEDIUM AND SMALL SCALE
ENTERPRISES.................................................................... 15
2.8 RELATIONSHIP BETWEEN TAX ADMINISTRATION AND
PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES
IN LIRA MAIN MARKET....................................................... 16
2.9 CONCLUSION.................................................................... 17
CHAPTER THREE (RESEARCH METHODOLOGY)
3.1 INTRODUCTION................................................................. 18
3.2 RESEARCH DESIGN............................................................ 18
3.3 SAMPLING DESIGN AND PROCEDURES................................ 18
3.4 SAMPLE POPULATION AND SIZE......................................... 18
3.5.1 DATA COLLECTION.......................................................... 19
3.5.2 METHODS OF DATA COLLECTION....................................... 19
3.6 MEASUREMENT OF VARIABLES.......................................... 20
3.7 DATAANALYSIS ................................................................ 20
3.8 LIMITATIONS................................................................... 20
3.9 DELIMITATIONS............................................................... 20
CHAPTER FOUR
PRESENTATION, INTERPRETATION AND DISCUSSION OF FINDINGS
4.1 INTRODUCTION............................................................... 21
IX
4.2 RESPONDENTS PERSONAL DAT A .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ... 21
4.2.1 GENDER OF RESPONDENTS................................................ 21
4.2.2 RESPONDENTS AGE .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 22
4.3 RESPONDENTS NATURE OF BUSINESS .. .. .. .. .. .. .. .. .. .... .. .. .. .... 22
4.3.1 POSITION OF THE RESPONDENT IN THE BUSINESS .. .. .. .. .. .. .. .. 23
4.3.2 NUMBER OF EMPLOYEES IN THE BUSINESS .. .. .. .. .. .. .... .. .. ..... 23
4.3.3 PAYMENT OF INCOME TAX................................................ 24
4.4 THE EFFECTS OF TAX ADMINISTRATION PROCESS ............ .... 24
4.4.1 RECEIPT OF TAX ASSESSMENT FORMS................................ 24
4.4.2 KEEPING BOOKS OF ACCOUNTS FOR TAX ASSESSMENT
PURPOSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 25
4.5 DETERMINATION OF TAX LIABILITY................................. 26
4.6.1 PERFORMANCE IN TERMS OF STOCK LEVELS ... .................. 26
4.6.2 PERFORMANCE LEVEL OF SMALL AND MEDIUM
SCALE ENTERPRISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.7 AMOUNT OF TAX PAID BY THE ENTITIES ANNUALLY......... 28
4.8 THE OVERALL OPINION ABOUT THE TAX PAID................... 28
4.9 NATURE OF RESPONSE AUTHORITY................................. 29
4.10 EFFECTS OF TAX ADMINISTRATION OF THE
EXPANSION OF STOCK LEVELS ....................................... 30
4.11 RELATIONSHIP BETWEEN TAX ADMINISTRATION
AND PERFORMANCE LEVEL OF SMALL AND MEDIUM
SCALE ENTERPRISES .. . . .. .. . . . . .. . .. .. . . . . . . .. . .. . . . .. . . . . . . . . . . . . . . . . . . . 30
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 INTRODUCTION .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 32
5.2 SUMMARY . . . .. . .. . . . . . . . . . . . . . ... . . . . . . . .. .. . . . . .. . . .. . . . . . . . .. . . . . . . ... . . . . ... 32
5.3 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.4 RECOMMENDATIONS....................................................... 33
5.5 AREAS FOR FURTHER RESEARCH .. .. .. .... .. .. .. .. .. .... .. .. .. .... .... 33
REFERENCES .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 34
