Assessing the Awareness Levels of Tax Incentives and Their Impact on the Performance of Small, Medium and Enterprises (SMEs): A Case Study of Ndola

The study assessed the awareness levels of tax incentives and their impact on the performance of Small and Medium Enterprises (SMEs) in Ndola, Zambia. Using a descriptive research design with a mixed-method approach, 100 SMEs were engaged through questionnaires and Megastat was used to analyse the collected data. The study focused on awareness levels of Tax incentives and the effect on profitability and business sustainability. The findings showed that awareness of tax incentives was generally low, with 50.5% of respondents reporting low and very low awareness, while 35% were not aware of any available tax incentives. Utilization was also limited, as 47% of respondents reported that they did not use tax incentives despite Anova reviewing the statistically significant effect. (F- Statistic = 32.54, P – value = 4.218e-8 and df = 99). Although some SMEs experienced improvements in profitability, 2% reported more than 30% increase in profit growth, 44% reported up to 30% and 54% reported no contributions while, non-reported more and up to 30% decrease. Hypotheses significance testing, however, showed that tax incentives have a significant relationship with SME profit. (P-value = 3.59e-7, t = -5.46, df = 99 and SD = 0.623). Hypotheses testing further found a statistically significant effect of implemented tax incentives on business sustainability. (p = 1.62 e⁻14, df = 99, and mean value of 3.920). The implication is that authorities should review tax incentive policies to ensure that incentives effectively support SMEs. The study therefore recommends that Zambia Revenue Authority and line ministries should improve awareness of tax incentives, simplify access procedures, review existing policies, and strengthen SME support programmes to enhance profitability growth and business sustainability.