Effect of tax incentives on the growth of SMEs in Rwanda: A case study of SMEs in Nyarugenge district
Dr. Daniel Twesige, Dr. Faustin Gasheja
The study analyze the effect of tax incentive on the growth of SMEs in Rwanda taking SMEs in Nyarugenge as the case study. Qualitative and quantitative research approach was adopted in this study. The population includes 49000 SMEs from agricultural, industrial, services and tourism sectors operating in Nyarugenge district. A sample of 136 SMEs was determined using the Silovin and Yemen’s formula of sample size. Simple random and purposive sampling technique was used to select the sample. Data was analysed using descriptive statistics. A multiple regression analysis was used to explain between variables. The results from the study revealed that 75.7% of the respondents agreed that they know the tax laws, 78.7% agreed that they know the tax incentives that are available to SMEs. The results further revealed that wear and tear, loss carried forward and VAT refund as the most tax incentives are available to Rwandan SMEs as evidenced by 100%, 94.1% and 95.6% respectively. The study indicated that there was a strong positive and significant relationship between tax incentives and the growth of small and medium enterprises in Rwanda as approved by coefficients of correlation which was equal to 88.8% of R-square. This meant that only 11.2% of the variation in the growth of SMEs was outside the tested variables. The study concluded that tax incentives are the key to the sustainable growth of SMEs. The government should design policies that specifically address issues related to the sustainable growth of SMEs.
Dr. Daniel Twesige, Dr. Faustin Gasheja. Effect of tax incentives on the growth of SMEs in Rwanda: A case study of SMEs in Nyarugenge district. International Journal of Advanced Educational Research, Volume 4, Issue 3, 2019, Pages 39-47