Project Topic:

EFFECT OF CAPITAL ALLOWANCES ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES.

Project Information:

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 52 ::   Attributes: Questionnaire, Data Analysis  ::   1,220 people found this useful

Project Department:

ACCOUNTING UNDERGRADUATE PROJECT TOPICS, RESEARCH WORKS AND MATERIALS

Project Body:

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Historically, Nigeria’s experience of taxation predates the colonial period. The Hausas of Northern Nigeria were paying taxes, though in kind, to the Emir in return for security and common services. However, with the advent of the colonialists, direct taxation was introduced in 1904 by Sir Lord Lugard, the then British appointed Governor. Its implementation started first in the North and later in the Southern and Eastern regions.

According to Ezejelue and Ihendinihu (2006) taxation can be defined as the demand made by the government of a country for a compulsory payment of money by the citizens of the country with the objective of raising revenue, satisfy collective wants of the people and regulate economic and social policies.

Aguolu (1999:17) defined capital allowance as expenditures deducted from profits before taxation to reduce the effect of taxation and thus encourage savings and investment. These capital allowances can come in form of expenses on assets, investments and other noncurrent assets/activities of the organization.

These capital allowances are however backed by various Government legislations. They are granted to enhance the growth and development of industries as well as empowering individuals and corporate taxpayers economically. This work will therefore focus on Capital allowances and their effect on small-scale industries with emphasis on selected small-scale industries in Nigeria, using Rivers State as a case study.

The modern day taxation and its use as a fiscal policy could be traced to 1926, which was a year of economic depression in Great Britain. During this period, Britain witnessed an unprecedented decline in her overall economic activities resulting to reduction in total earnings, shortage of fund in the private sector and reduced income per capital with attendant low standard of living. The effect of this depression was felt not only in Britain but almost the world over. Governments at this time were trying to revive, rehabilitate and mobilize enough capital to provide for economic and social expenses and to raise the standard of living of its populace. In doing this, various fiscal policies were formulated which include taxation.

According to Aguolu (1999: 1); taxation may be defined as a compulsory levy by Government through its agencies on the income, consumption and capital of its subjects. These levies are made on personal income such as salaries, business profits, interests, dividends, discounts and royalties. They are used to provide security, social amenities and create conditions for the economic well being of the society. The main purpose of taxation according to Ola (1998:14) is to raise funds to meet Government’s expenditure and to redistribute wealth and management of the economy.

1.2 STATEMENT OF THE PROBLEM

The objective of granting capital allowances and incentives to small and medium scale enterprises is to enhance their growth and development, thus contributing to the overall economic development of the country. But the objective cannot be achieved in a situation where the would-be beneficiaries are not even aware of the existence of such incentives. Moreover, the few who are aware of these incentives do not even bother to apply for them due to the poor and inefficient tax administration. Therefore, there is the need to proffer solutions to these problems to ensure the growth and development of our economy.

1.3 OBJECTIVE OF THE STUDY

The main objective of this study is to examine the effect of capital allowances on the performance of small and medium scale businesses in Nigeria. Specific objectives of the study are:

1.  To identify capital allowances available to SMEs in Nigeria.

2.  To examine the level of taxpayers’ awareness of the existence of capital allowances.

3.  To examine the effect of capital allowances on the profit after tax of small and medium scale businesses in Nigeria.

4.  To determine the relationship between capital allowances and growth of small and medium scale enterprises in Nigeria.

        1.4 RESEARCH QUESTIONS

The following research questions will be considered in this study:

1)  What are the Capital allowances available to small scale enterprises in Nigeria?

2)  What is the level of taxpayers’ awareness of the existence of these incentives?

3) What effects do Capital allowances have on after tax profits of small scale enterprises?

4)  Is there any relationship between Capital allowances and the growth of small scale enterprises in Nigeria? 

1.5 RESEARCH HYPOTHESES         

In order to ascertain the effect of Capital allowances on the performance of small-scale enterprises, the following hypotheses have been formulated:

        Ho1:  Capital allowances do not have any significant effect on the after tax profits of small-scale industries.

Ho2:   Capital allowances do not enhance the growth of small scale enterprises.

1.6 SIGNIFICANCE OF THE STUDY

The research will be of benefit to the government – policy makers and tax revenue authorities. It will provide a framework for the critical evaluation of tax policies, provides a basis for the modification of tax incentive design and identify loopholes in the present tax system that serves as disincentive to investment.

It will also benefit other researchers, forming a basis for further research on the subject in future. The study also gives a clear insight into the various ways in which tax policies in Nigeria can be executed efficiently to still favor small businesses and how some taxation policies in Nigeria can be properly tackled. The study also gives a clear insight into the various causes of why small businesses fail in Nigeria as well as the challenges of the tax policies in Nigeria. The findings and recommendations of the researcher will help in building a strong and better tax policy system in Nigeria, if taken seriously by government and the general public. The challenges of taxation in Nigeria are outlined in-order for drastic measures to be taken to tackle these challenges and meet the prospects of the general public so that revenue from tax policy to the government can be increased.

1.7 SCOPE OF THE STUDY

The study covers various capital allowances in assets such as buildings, vehicles, plants and machineries, and how they affect performance of small and medium scale enterprises in Nigeria, using selected small and medium businesses in Rivers state.

1.8 LIMITATION OF THE STUDY

The only limitation faced by the researcher in the course of carrying out this study was the delay in getting data from the various respondents. Most respondents were reluctant in filling questionnaires administered to them due to their busy schedules and nature of their work. The researcher found it difficult to collect responses from the various respondents, and this almost hampered the success of this study.

1.9 DEFINITION OF TERMS

Capital Allowance: Thisrefers to sums of money a business can deduct from the overall corporate or income tax on its profits. These sums derive from certain purchases or investments etc.

SME: Small and Medium Scale Enterprise

Performance: The accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed. In a contract, performance is deemed to be the fulfillment of an obligation, in a manner that releases the performer from all liabilities under the contract

Get the complete project »


Instant Share On Social Media:


Can't find what you are looking for?
Call (+234) 07030248044.

OTHER SIMILAR ACCOUNTING PROJECTS AND MATERIALS

AN APPRAISAL OF THE IMPLICATION OF ELECTRONIC BANKING IN NIGERIA BANKS (A CASE STUDY OF ACCESS BANK)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 67 ::   Attributes: Secondary data, Data Analysis,Abstract  ::   28001 engagements

CHAPTER TWO REVIEW OF RELATED LITERATURE Electronic banking in Nigeria has overtime been viewed by many especially economists as having a lot of implications on the economy of Nigeria and especially...Continue reading »

A CRITICAL ANALYSIS OF THE USE OF FINANCIAL STATEMENTS IN ASSESSING THE PERFORMANCE OF AN ORGANIZATION (A CASE STUDY OF FIRST BANK NIGERIA)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 75 ::   Attributes: Questionnaire, Data Analysis, Abstract  ::   26025 engagements

ABSTRACT The study was carried out to analyse how an organization performs making use of the financial statements with First Bank of Nigeria Plc serving as the case study. the study disclosed that th...Continue reading »

AN EVALUATION OF THE PERFORMANCE OF NIGERIAN STOCK EXCHANGE IN THE ECONOMIC DEVELOPMENT OF NIGERIA ( A CASE STUDY OF NIGERIAN STOCK EXCHANGE)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 78 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   12675 engagements

HISTORICAL BACKGROUND OF THE NIGERIA STOCK EXCHANGE IN THE ECONOMIC DEVELOPMENT OF NIGERIAN. The nigeria stock excahnge denoted by NSE is a government establishment where stocks are traded on a daill...Continue reading »

APPLICATION OF BUDGETS AND BUDGETARY CONTROL MEASURES IN A NON-PROFIT ORGANIZATION: A CASE STUDY OF APOSTOLIC CHURCH, DELTA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 76 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   17819 engagements

2.1 CONCEPTUAL FRAMEWORK A budget is can be defined by accountants as “a planned outcome to be generated and for the expenditure to ensure during that period and the capital to be employed to a...Continue reading »

ASSESSING BOOK-KEEPING PRACTICES OF SMALL AND MEDIUM SCALE ENTERPRISES IN CALABAR LOCAL GOVERNMENT AREA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 69 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   16375 engagements

ABSTRACT The economy of Nigeria cannot function properly or thrive without the micro, small and medium scale enterprises (SMEs). These small scale enterprises cannot function properly if they are not ...Continue reading »

ASSESSMENT OF ADEQUATE RISK RECOGNITION AND MANAGEMENT IN NIGERIAN INSURANCE COMPANIES (A CASE STUDY OF UNION ASSURANCE COMPANY, UYO)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 86 ::   Attributes: Questionnaire, Data Analysis  ::   10331 engagements

THE CONCEPT OF RISK Risk has been the subject of study by different scholars over the years with several meaning and definitions. But the most accepted definitions are that of J.E Banister and P.A Baw...Continue reading »

What are looking for today?

WHAT OUR CUSTOMERS ARE SAYING:
  • 1. Kater from FPN said "I love this website ".
    Rating: Good
  • 2. Victor from Unilorin said "Tested and trusted ".
    Rating: Very Good
  • 3. Haruna Usman Lame from Abubakar Tafawa Balewa University Bauchi said "I really enjoyed using this website am so grateful ".
    Rating: Excellent
  • 4. Bagu Manjing Dakan from polytecnic barkin ladi said "the use of information and communication technology in teaching of vocational subjects in plateau state polytecnic ".
    Rating: Excellent
  • 5. Ekeh Miracle from kaduna state University said "Toopnotch delivery from this crew I highly recommend everyyone to patronise them".
    Rating: Very Good
  • 6. Joseph from feck said "Bravo".
    Rating: Excellent