Impact of taxation policy on the survival of small and medium Size enterprises

Abstract

This study is on the impacts of taxation policy on small and medium size enterprises (SMEs). Over the years, small and medium size enterprises have been an avenue of job creation, providing about 50% of all jobs in Kenya and also for local capital formation. However the mortality rate of this small firms is very high, among the factors responsible for this untimely closure of the enterprises are tax related issues. The study therefore examines the impact of taxation policy on SMEs survival. The researcher derived a sample size of 63 respondents and a self-administered questionnaire was used to collect data. The data was descriptively analyzed with simple percentages. Research findings revealed that the taxation policies have negatively affected the survival of SMEs and the relationship between SMEs size and its ability to pay taxes is significant. The research therefore recommends that the government should come up with uniform tax policies that will favor the survival of SMEs in Kenya and the government should put into consideration the size of SMEs when formulating tax policies.