TAX REVENUE AND PROFITABILITY OF SMALLSCALE ENTERPRISES IN RIVERS STATE

This study examined tax revenue and profitability of small-scale enterprises in Rivers State. The focus of this study was to examine the relationship between tax revenue and profitability of small-scale enterprises in Rivers State. The objectives were to the effect of companies’ income tax, value added tax, return on assets and net profit margin. Secondary data were used for the research by the researcher. The population of the study consists mostly of food, grocery, and other small-scale enterprises in Rivers State. The random sampling technique was used for the study. The t-stat, Rsquare, adjusted R-square, and P-values were used to test the reliability of the research instrument in this study. The study made use of Least Square (LS) regression analysis as data analysis method. The study found that the two dimensions of tax revenue used; companies’ income tax and value added tax have a significant positive relationship with both measures of profitability as they were used; return on assets and net profit margin, thus, concluded that tax revenue have a significant relationship with profitability of small-scale enterprises in Rivers State. Based on the empirical findings, the study recommends that, when there is good tax revenue generation system, it will be able to increase the profitability of businesses drastically; as the system is being improved, the staff should also be trained to cope with the remittance of the tax liabilities (revenue) as this will give them a good business environment to work on and how demanding their job may be to remit those revenue; managers should be motivated to do their best. Absolutely to remit all the tax revenue and increase operating capacity leading to an increased profitability; the staff of the business should be reasonably remunerated to enable them put in their best in the business activities.