Unlocking Financial Potential: The Impact of System Accessibility on SME Performance in Kikuubo Business Centre, Kampala, Uganda

Abstract

Small and Medium Enterprises (SMEs) are the backbone of Uganda’s economy, contributing approximately 80% to the national GDP. To enhance tax compliance, the Uganda Revenue Authority (URA) deployed Electronic Tax Systems (ETS). However, in infrastructure-constrained environments, it remains debated whether digital tax accessibility translates into tangible financial benefits for the SMEs themselves. Grounded in the Technology Acceptance Model (TAM) and the Resource-Based View (RBV), this study investigated the impact of ETS system accessibility on the financial performance of SMEs in Kikuubo Business Centre, Kampala. Employing a mixed-methods research design, the study collected data from 189 respondents including SME owners, URA officials, and tax consultants using structured questionnaires and semi-structured interviews. Quantitative analysis via SPSS revealed that system accessibility is generally high (Composite Mean = 4.13), with system uptime scoring the highest (Mean = 4.35). Furthermore, SMEs reported strong financial performance (Composite Mean = 3.88). Pearson correlation analysis established a strong, positive, and statistically significant relationship between system accessibility and financial performance (r = 0.711, p < 0.01), confirming that improved digital access enhances profitability, cost efficiency, and revenue growth. Despite these positive correlations, qualitative insights uncovered a critical usability gap. Findings revealed that 90% of SMEs still face significant technical challenges including interface complexity, slow system responses, and internet outages forcing them to rely on costly third-party tax agents. This reliance inadvertently erodes the net financial gains of digital accessibility. The study concludes that while infrastructural accessibility is a strong predictor of financial performance, it is insufficient on its own. To unlock the full financial potential of digital tax systems, policymakers and the URA must shift their focus from mere system availability to user-centered functionality, targeted digital literacy training, and the stabilization of local digital infrastructure in informal trade hubs.