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The purpose of this study was to examine the impact of taxes on the expansion of the Aningdoh Credit Union (ANNICUL). The primary goal of the study was to establish the impact of taxation on the expansion of ANNICUL as well as to identify the difficulties associated with Cameroon’s taxation policy. It is necessary to use questioners in order to gather information for this study.

The analysis of the data acquired was done in a table for the hypothesis that was tested using the chi-square method and in question and answer format for the other hypotheses that were tested. It is evident from the scale’s results that taxation has a negative impact on the ANNICUL.


Their findings demonstrate that Cameroon’s tax policy is not beset by many difficulties, and the researchers urge that the fiscal authority strive to implement a more effective tax policy, which can be accomplished by attempting to register every MFI. As a result, they are brought into the tax net.


More specifically, a better approach that can better access the tax liabilities should be developed rather than relying on the presumptive approach, which is a base assumption that may not accurately reflect the genuine tax liability for a period of time






1.1 The Study’s Historical Context


The purpose of this research is to determine the impact of taxes on the expansion of ANNICUL. Over the years, Micro Finance Institutions (MFIs) have served as a vehicle for job development and citizen empowerment in Cameroon, accounting for approximately half of all jobs while also contributing to local capital formation.


The mortality or death rates of these micro-firms, on the other hand, are quite high. These untimely closures are attributed to a variety of circumstances, including tax-related concerns, which might range from multiple taxation to extremely high tax obligations. As a result, the study investigates the impact of taxation on the survival of the ANNICUL.


The research design is a survey research design with a total population of 91 participants. The world economy has grown considerably in recent years, and this has been related to the activities of Micro Finance Institutions (MFIs), particularly in developing nations, which have played a role in this development.


According to a study conducted by the Federal Office of Statistics, Micro Finance Institutions account for 97 percent of the productive units of the economy in Cameroon (Ariyo, 2005). Despite their tiny size, they are the most important enterprises in the economy because, when all of their individual effects are added together, they outperform the larger corporations in terms of importance.


We cannot exaggerate the importance of Micro Finance Institutions in terms of creating jobs, stimulating competition, increasing economic dynamism and innovation while also encouraging the entrepreneurial spirit and the distribution of skills. MFIs, in addition to having a greater geographic presence than large corporations, help to ensure more equitable distribution of income among the population.


Over the years, microfinance institutions (MFIs) have served as a vehicle for employment creation and empowerment. The mortality rate of these micro-firms, on the other hand, is quite high. According to the MFIs Development Agency of Cameroon, 80 percent of microfinance institutions (MFIs) fail before reaching the fifth anniversary of their founding.


Tax-related concerns, which can range from multiple taxes to large tax obligations, among other things, are one of the factors contributing to these untimely closures. Microfinance institutions are frequently seen and treated in the same way as huge businesses are under many government laws and programs.


Their size and nature, on the other hand, distinguish them. As a result, when dealing with microfinance organizations, it is necessary to take these particular characteristics into consideration. When it comes to levying taxes on these operations, there are several aspects to address, including how tax laws might be tailored to encourage the expansion of MFIs and the most efficient ways to administer them. The relevance of microfinance institutions (MFIs) as a vehicle of economic growth and development is sometimes overlooked.


They are regarded as insignificant establishments with a negligible impact on the state of the economy as a whole. However, if an environment conducive to the growth of these MFIs is created through appropriate regulation, the MFI sector has the greatest potential to revolutionize our economy.


Taxes, in the same way, are crucial to the government because they provide the majority of the cash for government expenditure. Individual and business taxation generates revenue that is used to run governments as well as to provide infrastructures such as good roads, water supply, and electricity, which are necessary for the smooth operation of these businesses, which are primarily manufacturing companies that rely on these commodities for their continued existence.


Although taxation can contribute to development and wellbeing in three ways, Holban (2007) asserted that taxation can contribute to development and welfare in three ways:


It must be capable of generating adequate funds for the financing of public services and social transfers of good quality.


It should provide incentives for increased employment as well as for the efficient and long-term utilization of natural resources.


Finally, it should be able to redistribute its earnings.


However, in the case of microfinance institutions (MFIs), taxes must be levied in a way that takes their income and survival requirements into account. It is preferable if a sufficient amount of profit is permitted for the aim of increasing their enterprises. The tax policy should be such that it does not encourage MFIs to continue in the informal sector or to evade or avoid paying taxes. Many micro-firms in Africa, particularly Nigeria, choose to remain in the informal sector because they believe the benefits exceed the expenses of doing business in the formal sector.


In this section, we will discuss the problem in more detail.


In spite of the widespread belief that taxes are a significant source of funding for economic growth and social services, many businesses face difficulties in sustaining and expanding their operations because of the relationship that exists between taxes and their ability to sustain or expand their operations.


MF Institutions are confronted with the challenges of high tax rates, numerous taxing, complex tax legislation, and a general lack of awareness or education about tax-related issues. Leaving aside the numerous challenges that MFIs face in other developing countries, such as Cameroon, such as insufficient capital, inadequate technical and managerial skills, environmental consequences, and government regulations that affect the operation of MFIs, in Cameroon, in particular, the issue of multiple taxation, which is a worm that is eating deeply into the revenues generated by these MFIs, which is critical to their growth and survival. These have resulted in an increase in the number of MFIs that have died in recent years. As a result, an investigation was carried out to determine the impact of direct and indirect taxes on the growth of ANNICUL.


1.3 Research questions

The research questions will be divided into two parts

1.3.1 Main Question

Do taxes have an effect on the growth of ANNICUL?

1.3.2    Specific Questions

  1. What is the effect of direct taxes on the growth of ANNICUL?
  2. What is the effect of indirect taxes on the growth of ANNICUL?

1.4 Objectives of the study

1.4.1 Main Objective

The general objective of the study is to examine the effect of taxes on the growth of ANNICUL

1.4.2 Specific Objectives

  1. To examine the effect of direct taxes on the growth of ANNICUL
  2. To examine the effect of indirect taxes on the growth of ANNICUL

1.5 Research hypothesis

H1: Direct taxes have a negative relation to the growth of ANNICUL

H2: Indirect taxes are negatively correlated to the growth of ANNICUL

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