The Effect of Taxation on the Performance of Small and Medium-Sized Enterprises in Buea

ABSTRACT

The study is title the Effect of Taxation on the Performance of Small and Medium-Sized Enterprises in Buea Municipality and has an objective to determine the extent to which taxation affect SMEs in Buea, to examine the various types of taxes paid by SMEs in Buea, and to examine the challenges faced by small and medium-sized enterprises in paying the taxes. Taxes play an important role in the growth of small and medium-sized enterprises. In the low-income countries like Cameroon, the role of SMEs is critical in pushing the socio-economic development agenda of the countries reward. Therefore, alignment of the tax system to the environment specific SMEs growth needs can be considered an important agenda for political, economic and financial policy makers. This study applied both qualitative and quantitative research designs where questionnaires were used. Data was collected using primary sources where a structured questionnaire was designed considering a sample size of 30 SMEs. Data was processed and analyzed using frequency tables and regression analysis, to find out the relationship between taxes and performance of small and medium size enterprises and the results show that taxation significantly affects the performance of SMEs. Thus, the study recommended that tax administration should reduce criminal aspects of tax evasion with well-known tax measures. Further, tax administration should use current tax reform to reduce tax complexity with tax authorities should focus and help taxpayer during filing taxes returns information. However, tax authority provides greater assistance to tax payers. It should create favorable conditions for tax compliance not only tax awareness.

Keywords: Taxation, Performance and Small and Medium Size Enterprises.

1.3 Objectives of the study

To provide answers to the research questions, we are guided by the research objectives.

The main objective of this study is to examine the effect of taxation on the performance of Small and Medium Size Enterprises (SMEs) in Buea.

The specific objectives that assist in the achievement of the main objective for the study include;

1. To determine the extent to which the performance of taxation affect SMEs in Buea.
2. To examine the various types of taxes paid by SMEs in Buea.

• To examine the challenges faced by small and medium size enterprises in paying taxes.

1. To make necessary recommendations to both SMEs and tax authorities.