Effect of Covid-19 Tax Relief on the Financial Performance of Top 30 Small and Medium Enterprises in Kenya

Abstract

This research sought to study sought to study the effect of Covid-19 Tax Relief on the performance of SMEs in Kenya. The research looked at 30 SMEs using descriptive research design. The study was informed by the current prevailing circumstances that caused economic turmoil in the Return on Assets of SMEs in Kenya. The study focused on 30 SMEs using the descriptive research design with the help of SPSS. The research established the level of association amid the predictor variables was within the normal range. Furthermore, the data followed the normal distribution pattern while the association amid the regressor and the regressed variable was significant. The research also found that the study followed the linearity association. The findings from the study was reinforced by the regression model with the R value of 0.495 which indicate that the three variables of the study were informed by the 49.5%. Therefore, the variables that determine financial performance that were not captured in the study were 50.5%. The study found out positive association amid Covid-19 personal Tax Relief and Return of Assets of SMEs in Kenya. Furthermore, there was positive association between Covid-19 Tax relief and the Return on Assets of SMEs in Kenya. However, the research findings indicated negative association that linked the Covid-19 Tax relief and Return on Assets. The performances of SMEs were measured by the return on Assets. In a nutshell, the study was crucial for decision making, benchmarking and fact-finding. A unit change in either Covid-19 personal relief or covid-19 corporation relief will bring about a same direction change to ROA while a Unit Change in Covid-19 VAT tax will bring about a same change but to opposite direction. This study advocate for formulation of policies that fuels the growth.