ABSTRACT

The main objective of every small scale industries or business is to maximize profit. The choice of the topic "the effect of income tax on the performance of small scale industries" derives frog, the fact the most management of business entities are yet to come to terms with the realities on the implication of taxes are incontrollable business expenses. Moreover, the statement of the problem that prompted the injury and research of this work is that most of the small scale manufacturing firms in this area mostly in Abia State are suffering from profit squeeze and inefficiencies. There is also inadequate infrastructure which gives the small scale industries headache in the industries. They suffer from low capital base because they cannot be able to borrow from financial institutions. There is the inability to employ and pay lip trained and competent personnel and they go for cheap unskilled labour Therefore, is the purpose of this study to investigate and discover f any of the effect of income tax on the performance of small scale industries in Abia State. In doing this the researcher went through and also made use of The primary sources. The primary data were collected from the selected firms, by the means of questionnaire, interview and observation. While the research was conceived so as to establish why personal income tax is essential its development with the contest of Nigerian economy especially in Abia State. Questionnaires were distributed to both the top management and financial accounts departments of the selected firms in order to ascertain their views on the effect of personal income tax as it relates to their companies and also provide as much as I could solutions which will help them to go about their tax. Statistical methods used in analyzing the result of the information are the regression analysis, multiplies regression method here also used to ascertain data base on the data analysis, the hypothesis were tested and later concluded that personal income tax has no positive effect on dividend. Policy and tax consideration have effect on PBT of the small scale industries in Abia State. Finally, the key recommendation given were that the forces of taxation are too large to ignore and the management must recognize them giving particular attention to the options facing their firms. That tax planning should be kept in proper perspective so that the goal of minimizing taxes would be neither ignored nor allowed to conflict with the primary goal of the firm and that the personal income tax in any form should be viewed as a legal obligation rather than as a constraint to the business operations.