Literature review of the impact of intermediate money transfer tax (IMTT) on performance of SMES

Abstract

PURPOSE: This desktop study sought to investigate the impact of IMTT on performance of SMEs.

METHODOLOGY: Documentary research approach, which consists of reviewing, analysing and examining information, recorded media and texts were adopted for the study. In terms of data collection, the authors sourced and reviewed literature on the topic. Among others, these sources included journal articles, books, magazines and newspapers.

FINDINGS: The study revealed that IMTT has negative impact on frequency of transactions and that transactions increased where they were below minimum threshold. Furthermore, it emerged that IMTT has negative impact on suppliers’ payments and that suppliers’ payments were delayed and use of cash was urged due to IMTT. In the same vein, the study showed that IMTT has negative impact on firm performance meaning that profitability decreased due to the adoption of IMTT.

ORIGINALITY/VALUE: Management should try to minimize frequency of transactions by weighing the benefits with the costs of paying taxes. In addition, financial performance should be enhanced by focusing on proper pricing and cost minimization. The suppliers’ payment should be done on timely fashion to maintain constant supply and good relations rather than practicing tax avoidance.