1.1 BACKGROUND TO THE STUDY
Asmelash (2002) describe small scale enterprises as an activities engaged by people who are unable to secure paid jobs or start economic activities of their choice. These kinds of business are family oriented and are often manage or controlled as family business. It is an accepted fact that small and medium scale is an engine to economic growth of the economy. Taxation can simply be seen as a required transfer or payment of money from private individuals, institutions or groups to the government. It may be levied upon wealth or revenue in the form of surf-charge on prices. Taxes therefore are a proportion of the produce of land and labor of a country placed at the disposal of the government. Multiple taxation on the other hand, is the imposition of different types of taxes that could have come under one major tax form on the people by the government.’ At times some of the taxes are christened levies. However, within the context of this work, all required payment made by individuals and institutions to the government are regarded as tax. Taxes generally provide basis for government revenue, which help them in carrying out their functions. This is why Ojo (1996) defined tax as a means by which government suitable part of private sector’s revenue and expenditure for the purpose of meeting recurrent expenditure and creating public capital formation towards the development and growth of goods and services-of the economy. A tax, although may be imposed for the above purposes fit has effects on the behavior of the payer and some variables within his revenue and consumption function. Small-scale enterprises have so many definitions due to different criteria employed by different people and institutions in defining it. There is no single, uniformly accepted definition of a small firm (Storey, 2011) Firms differ in their levels of capitalization, sales and employment. Hence, definitions which employ measures of size (number of employees, turnover, profitability, net worth, etc.) when applied to one sector could lead to all firms being classified as small, while the same size definition when applied to a different sector could lead to a different result. However, Holban (2007) suggested that taxation can add to the development and welfare through three sources; It must be able to generate sufficient funds for financing public services and social transfers at a high level of quality, it should offer incentive for more employment and for an efficient and lasting use of natural resources, finally it should be able to reallocate revenue.