| dc.description.abstract | The growth of the world’s economy has been heavily reliant on taxes. This study assessed the impact of tax policies on the growth of Small and Medium Enterprises (SMEs) in Kawempe division Kampala district. Specifically, the study examined the effect of: tax registration and assessment on the growth of SMEs; tax rates on the growth of SMEs; and effect of tax incentives on the growth of SMEs in Kawempe division Kampala district. The study adopted a descriptive research design and data was collected from a sample of 300 business operators in Kawempe division, using administered questionnaires. Data was analyzed descriptively using frequencies, percentages, mean and standard deviation; and the inferential statistics used were Pearson’s correlation coefficient and regression analysis. Findings indicated: a positive weak significant relationship between tax registration and assessment and growth of small and medium enterprises in Kawempe division (r= 0.122, P<0.05); a positive weak significant relationship between tax rates and growth of small and medium enterprises in Kawempe division Kampala (r=0.120 and P-Value<0.05); and a moderate positive relationship between tax incentives and growth of small and medium enterprises in Kawempe division (r=0.430, p-Value<0.01). Findings indicate that tax registration, tax rates, and tax incentives jointly account for 23.1% of the variations in the growth of SMEs in Kawempe division (Adjusted R2 = 0.231). The study concluded that Tax Incentives have the strongest positive and significant influence on SME growth, reinforcing the importance of maintaining and enhancing incentives to foster business growth. Although Tax Rates and Registration had a weaker impact compared to tax incentives, they still contribute positively to the overall model, highlighting the need for a balanced approach in tax policy design. The study recommended that: The Ugandan government should establish an efficient and competitive tax rate system that is aligned with the economic conditions of SMEs. Lower tax rates would reduce production costs, stimulate sales, and ultimately foster SME growth. To enhance tax incentives, the government should strengthen tax incentives, such as investment deductions and tax holidays, to support SME development. These incentives help reduce operational costs, encourage investments, and provide critical support to new businesses that may lack access to financing in their early stages. To improve Tax Registration and Compliance, efforts should be put to simplify and make the process more transparent could improve compliance and encourage businesses to formalize their operations. | en_US |
