ABSTRACT

The main aim of this research was to determine the impact of taxation on private enterprise in Cameroon focusing on BRUNO & SON ENTERPRISE. Descriptive research design was use for this study. A sample of 100 respondents was selected using stratified random sampling from private enterprise in south west region. The primary data obtained using questionnaire was analyzed using descriptive statistics. Finding from the study reveals that tax rates have a negative significant effect on the growth of private enterprise. Since the types of taxes are determined by the level of income that the sole proprietors of micro enterprise such as BRUNO & SON LT receive, if better and favorable type of taxes are adopted then they would boost expansion of private enterprise. In the recommendations of this research paper more friendly tax policies are employed for private enterprises such as tax holidays.

Key words impact, taxation, private enterprise.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study.

Taxation which originates from the word estimate, were levied either on the sale and purchase of merchandise or livestock and were collected in a haphazard manner from time to time. Julius caesar (1943:63), was the first to expatiate on a sales tax. Taxation is the means by which a government or the taxing authority imposes or levies a tax on its citizens and business entities.

The imposition of such levies on the private enterprise affects their productivity, capital input, effectiveness, efficiency, and amongst all their profit. Government tax system can therefore be favorable or unfavorable on the private enterprise in the mentioned aspects.    

Taxation is the imposition of compulsory levies on individuals or entities by governments, taxes are levied in almost every country of the world. Primarily to revise revenue for government expenditures, although they serve other purposes as well. Notably, it is used as instrument of government policy to either slow down economic activities or economic boom for benefits of the state. And as such, taxes have always influenced the characteristics of not just private but public enterprises. In modern economies taxes are the most important sources of government revenue. The taxation structure can be classified into two main categories direct and indirect tax.

A major criticism of taxation in the establishment of private enterprises such as Bruno and Son Lt. is that the government levy high taxes on individual or taxpayer income thereby reducing their financial strength to carry out investment.

According to Howell Zee (1997:179) he reviews the conceptual linkages between taxation and unemployment, available empirical evidence and country policies that may have a beating on these linkages.

According to Paul Anthony, he elucidates on the notions about the electorates performances between private and public enterprises.

1.2  Statement of Problem 

  Assess the impact of taxation in establishing private enterprises.

Taxation is a compulsory levy on individual or entities by the government. Taxes are levied in other to raise revenue for government expenditure although they serve other purposes as well. In the modern economy taxes are the most important source of government revenue, taxation structure can be classified into two which are direct and indirect tax. Taxation has both favorable and unfavorable effect on profit margin and the payment of waged and salary in Bruno and Son Lt.

Whether taxes are increased or reduce no matter the case it must surely have a negative or positive impact on the enterprise respectively. An increased tax will mean that the enterprise will face more challenges such as increase in general cost of running the company as taxes are part of the general cost of the company. This will as well reduce the enterprise profit margin leading to shortage in managing the company affairs. On the other hand reduction in taxes on the private enterprise will see to cost reduction in the managing of the company such as payment of wages, repairs, increasing stock, just to name a few. A major criticism of taxation in the establishment of private enterprises is that the government levy high taxes on individual or taxpayer income thereby reducing their financial strength to carry out investment.

  1.3 Research Questions 

• How can taxation impact the establishment of private enterprise?
• Why are private enterprises highly taxed in Cameroon?
• What are the importance of taxation to the private enterprise?

  1.4 Research Objectives

    – To assess the impact of taxation on the establishment of private enterprises.

    -To identify the reason for high taxation of private enterprise by the state.

    -To evaluate the importance of taxation on a private enterprise.

 1.5 Research Hypothesis

H_o1– Taxation does not have negative impact on the establishment of            private enterprises.

H₁– Taxation has a negative impact on the establishment

H_o2– Government does not impose high taxes on private enterprises.

H₂– Government imposes high taxes on private enterprises.

H_o3– Taxation does not have any importance on the private enterprise.

H₃– Taxation is important on the  private enterprise.