The Role of Tax Incentives for Businesses Sustainable Development in Ethiopia

Abstract

The sustainability of the business is very important in the economic development of nations across the world.  In particular, they contribute to the development of the nation’s economy by creating new job opportunities and paying taxes to the government and base for the expansion of world trade. This paper aims to examine the relationship between tax incentives and the business sustainability of micro, small and medium business enterprises in Ethiopia. The quantitative research approach was employed by the researcher. The primary data were collected through a questionnaire.  Simple random sampling has been employed to select four hundred respondents.  Multiple regression analysis has been employed to conduct data analysis. Hence, the regression model showed out of six variables tested through regression analysis, all variables were statistically significant. The current study was limited to six monetary tax incentives variables using primary data sources. To survive, small business needs support from the government in the form of tax incentives. Practically, the role of tax incentives in enhancing the growth of small business enterprises is very significant for their sustainability as well as the country’s economy as a whole. It is recommended for further research work to incorporate non-monetary tax incentive variables and use both primary and secondary data sources to improve the findings of this study.

Keywords: tax incentives, sustainable development, small business enterprise

DOI: 10.7176/RJFA/14-5-01

Publication date:March 31^st 2023