The Impact of Tax Policies on viability of SMEs: a case of SMEs in Bindura Town

Author

Maduveko, Stephanie.

Title

The Impact of Tax Policies on viability of SMEs: a case of SMEs in Bindura Town

Abstract

Small and medium-sized enterprises (SMEs) play a crucial role in driving economic growth, employment creation, and innovation. In the European Union (EU), there has been a growingrecognition of the need to create a tax environment that is conducive to SME growth. The main objective was to investigation he impact of tax policies on viability of SMEs in Bindura. This research employed a descriptive research design and stratified random sampling technique with a sample size of 186 SMEs. This research used a quantitative data analysis techniques, using SPSS software. The study found that import Duties have the highest perceived impact on SME viability and financial performance (mean score: 4.19). This could be due to factors like industry type and reliance on imported goods. Income Tax (4.05) and Corporate Tax (4.13) also have relatively high perceived impact, suggesting a significant burden on SMEs. There is a somewhat positive perception of current tax policy fairness and transparency (mean score: 4.15), but there's also variation in opinions (standard deviation: .667). This could be due to a lack of understanding of tax regulations. The effectiveness of existing tax incentives for new SMEs has mixed reviews v (mean score: 3.97). While some SMEs find them helpful, others perceive them as inadequate or poorly targeted (standard deviation: 1.139). SMEs strongly believe lower tax burdens would be beneficial (mean score: 4.55). There is some variation in opinion (standard deviation: .617), but the sentiment leans positive. Offering tax breaks for reinvesting profits is viewed favorably by SMEs (mean score: 4.17). However, there is more variation in opinions compared to reduced tax rates (standard deviation: .839). These findings suggest that policymakers should consider a multi-pronged approach to tax reform for SMEs. Reducing tax burdens, particularly import duties, income tax, and corporate tax, could be a significant positive step. Additionally, policymakers should explore offering tax breaks that incentivize reinvestment for growth

Date

June 2024

Publisher

BUSE

Keywords

Tax Policies,

SMEs in Bindura Town

Descriptive research design

Supervisor

NIL