The Effect of Corporate Tax on The Financial Performance of Business Orga Nizations in Rwanda (Case Study: Rwanda Stock Exchange)

Noella Tuyishime and Angelo Ndayiragije
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Noella Tuyishime: Faculty of Applied Fundamental Sciences Department of Applied Economics Masters of Science in Taxation
Angelo Ndayiragije: Faculty of Applied Fundamental Sciences Department of Applied Economics Masters of Science in Taxation

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 9, 1485-1497

Abstract: The performance of Rwandan business groups with regard to corporation tax is examined in this study. The research recognizes that taxes play a critical role in shaping both the corporate environment and the macroeconomic environment. This study attempts To assess the impact of corporation taxes on stock return within business organization in Rwanda, To assess the effect of corporate tax on return on Investment in business organization in Rwanda and To assess the effect of corporate tax on leverage in business organization in Rwanda in order to offer important insights into the intricate interaction between taxation policies and company results in Rwanda by examining the link between corporate tax rates and several performance metrics such return on equity, return on investment, and leverage. The study uses a quantitative methodology and financial data from a sample of Rwandan companies in a variety of industries us previous reports from Rwanda Stock Exchange. To evaluate how corporate tax affects various performance measures, statistical approaches, such as Pooled Regression Model Utilizing E-views, were used. The study also takes into account how government regulations and tax breaks affect the choices and tactics used by businesses. The results of this research is anticipated to advance knowledge of how CT policies affect the performance and competitiveness of businesses in Rwanda since The coefficient for at a standard significance level, CORP_ TAX is statistically significant (p- value = 0.0403 0.05).), which is sufficient evidence to show that corporation tax has a significant impact on leverage in this scenario. This knowledge can assist policymakers in crafting tax policies that promote economic growth while ensuring fiscal sustainability. Furthermore, business leaders can gain insights into optimizing their tax planning and financial strategies in response to the prevailing tax environment. The research on how corporate taxes affect how well businesses function in Rwanda deals with a complicated and dynamic topic of study that has ramifications for many different stakeholders. The research aims to contribute to the larger scholarly discussion on taxes and company success, give practical insights for business organisations, and inform government.

Date: 2024
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