Effect of Turnover Tax on Small and Medium Enterprises’ (SMEs) Growth in the Clothing Retail Industry: A Case Study of Lusaka
Journal Title: Journal of Economics, Finance and Management Studies - Year 2024, Vol 7, Issue 01
Abstract
Taxation plays an important role in the development of every economy as well as the growth of Small and Medium Enterprises (SMEs). The purpose of the study was to evaluate the effect of turnover tax on the growth of small and medium enterprises in Lusaka and the specific objectives were; to establish the significant effect of tax incentives on SME growth in the Zambian retail sector; to find out whether the Zambian tax system espouses the basic principles of “efficiency” and “equity” in the retail clothing industry; and to assess the effect of tax policies on SMEs business profitability in the retail clothing industry.The approach adopted was mixed method. This study was based on a survey of 72 selected clothing retail stores out of the available 4433 retail businesses in Lusaka.The sampling technique applied in this research wasjudgmental sampling. The survey was administered using 72 questionnaires which had a 100% return rate. Data was analyzed through descriptive statistics, correlation and regression analysis and findings were presented in terms of frequencies and percentage analysis.The results demonstrated that tax incentives stimulate the growth of the business. It was also ascertainedthat ‘equity and fairness’ does not seriously affect the growth sort after by SMEs in the clothing retail industry.Additionally, this studyestablished that turnover tax significantly affects the profitability of SMEs in the clothing retail industry negatively. The study recommends that government should implement innovative incentives and enhancing policies that could help businesses deal and cope with uncertainties and different macroeconomic situations. It was also suggested that policy makers shouldsimplify the taxadministration systems to make it easier for taxpayers to pay taxes willingly and easily. Furthermore, the government through the relevant line agencies should provide an enabling environment and social services that support business profitability. This paper, therefore, is a strong line of policy advocacy on the imperative need for government through the Ministry of Finance and National Planning along with its line agencies to entrench tax policy incentives (not only in respect to the subject matter subsector of this study)which do not only incentivize the SMEs ecosystem but equally give growth, sustainability and profitability of these entities for the overall socio-economic development of the nation. This is the surest way of guaranteeing job creation, poverty and inequality reductions amongst the masses of Zambia, who are lamentably wallowing in the paradox of abject poverty in the land of plenty.
Authors and Affiliations
Twaambo Karen Simbyakula, Chrine C. Hapompwe
Keywords
Related Articles
- EP ID EP730238
- DOI 10.47191/jefms/v7-i1-61
- Views 81
- Downloads 0
Analysis of The Effect of Reliability, Privacy and Security, Website Design, Customer Service and Support, and Satisfaction towards Loyalty of Livin’ by Mandiri users in Medan
Along with the rapid development of technology coupled with the Covid-19 pandemic, the internet has become an important necessity and has made mobile banking such as Bank Mandiri mobile banking (Livin’ by Mandiri) increa...
Is It Possible to Apply Gig Economy for Farmer in Indonesia?
The gig economy keeps growing along with the development of digital technology and internet accessibility. The gig economy already applied to various sectors, especially to digital-based jobs. The gig economy is going to...
The Effect of Compensation and Work Environment on Employee Performance through Work Motivation at PT. PLN (Persero) Bululawang
This study aims to describe compensation, work environment, motivation and employee performance, analyze compensation and work environment on motivation, analyze compensation and work environment on employee performance,...
Nexus Among ICT Support for Core Competencies, Competitive Advantage and Firm Performance: A Managerial Phenomenology Approach
This study analysed the nexus among ICT support for core competencies, competitive advantage and firm performance using data obtained from managers of firms in Harare, Zimbabwe. The qualitative phenomenological approach...
The Influence of Independence and Understanding of Good Governance Auditor Government on the Performance of Government Auditors (Case Study on BPK RI of West Java Province)
The purpose of this research is to ascertain how the performance of government auditors at BPK RI West Java Representative is impacted by their independence and knowledge of good governance. This study employed a quantit...