Abstract:
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ABSTRACT
The study assessed the implication of withholding tax deductions on working capital
management towards contractor’s profitability in government funded project in Tanzania. The
study was guided with three specific objectives that generated research questions that were
used towards facilitating knowledge generation process. The objectives include examining the
practices of withholding taxes deduction and its implication towards working capital in
government funded projects in Tanzania; to determine effect of withholding taxes on working
capital towards profitability of government funded projects in Tanzania; and to identify the
challenges of withholding taxes on profitability of government funded projects in Tanzania.
Exploratory design was used in facilitating knowledge generation process through testing of the
subjective reality using research questions guided the study. The study was conducted in Jandu
Plumbers Limited as the case of the inquiry with primary data being used to assure information
gathering from the employees sample size. The facts for the study were generated from the
sample of 53 participants using questionnaires and interviews. The collected results through
questionnaires were computed in SPSS software version 23 which fostered the gathering of
descriptive statistics to present the results. Facts that were collected using interviews were
analyzed using content analyses which were narratively presented with themes to support the
results. Findings revealed that with the practices withholding taxes deductions are higher in
government funded projects than others. Also, with effects the taxes have had negative effects
with implication on profitability defects and performance concerns in the projects as the
outcomes or results. Furthermore, withholding taxes deductions has been the source of
challenges in the working capital on the conduct of government funded projects with implication
on profitability and performance. The implication of the results is that withholding taxes
deductions constitute defects on the working capital with regard to the government funded
projects which has implication on the performance of the projects as well as contractor
profitabilit
