Table 7 Exploratory factor analysis

MSMEs Sustainability

There is an increase in profitability compared to main competitors during the last 12 months

0.865

There is an increase in sales volumes compared to main competitors during the last 12 months

0.819

There is an increase in Market share compared to similar business during the last 12 months

0.540

There is an increased Customer base compared to main competitors during the last 12 months

0.661

There is an increasing number of employees compared to main competitors during the last 12 months

0.570

There is increased Assets growth compared to main competitors since the last 12 months

0.843

There is increased Product quality compared to main competitors during the last 12 months

0.810

There is increase Production levels compared to main competitors during the last 12 months

0.570

There is increase The overall performance compared to main competitors during the last 12 months

0.848

Tax holiday

 Tax holiday incentives existing in the country is too costly to become beneficiary for MSMEs

0.830

 Government make publicly available information about tax holiday incentives for MSMEs

0.726

 The country adopted an equivalent standard for granting tax holiday incentives for MSMEs

0.861

 Everyone of MSMEs knows that which authority has the final decision on whether to grant tax holiday incentives to the specific investment

0.861

 MSMEs operators know that where does the country’s tax incentives regime provisions include tax holidays

0.814

 The tax holiday incentive is known and in practice in your enterprise

0.504

 Our enterprise has given the tax relief due to purchasing business equipment

0.731

 Tax allowance incentives existing in the country is too costly to become beneficiary for MSMEs

0.549

Tax allowance

 State make publicly available information about tax allowance incentives for MSMEs

0.710

 The country adopted an equivalent standard for granting tax allowance incentives for MSMEs

0.640

 MSMEs knows that which authority has the final decision on whether to grant tax allowance incentive to the specific investment

0.841

 Operators of MSMEs know that where the country’s tax incentives regime provisions include tax allowance

0.740

 The tax allowance incentive is known and in practice in your enterprise

0.641

Accelerated depreciation

 Accelerated depreciation provides MSMEs a way of deferring income taxes by reducing taxable income in current years

0.856

 I believe that accelerated depreciation is a valuable tax incentive that encourages SMEs to purchase new assets

0.707

 Our enterprise uses the double-declining balance method to calculate the depreciation expense of fixed assets by SMEs

0.683

 Our firm has always used accelerated depreciation during the last five years

0.571

 Accelerated depreciation is expected to be much more productive during its early years

0.480

 The government of Ethiopia charged a lower tax rate for encouraging MSME

0.824

 I believe that the tax rate of SMEs is lower in completion sole proprietorship and partnership

0.825

Reduced tax rate

 Deduction of tax rates for SMEs is helpful to increase retained profits for reinvestment purposes

0.971

 The government protects the market for MSMEs import duties and promoting of purchases of locally produced goods by reducing the tax rate

0.514

 When reduced tax incentive plans are in place, employees recognize that significant effort on their behalf will be acknowledged and rewarded

0.848

 The tax authority of Ethiopia charged a lower tax rate for encouraging MSME

0.830

 I believe that the tax rate of MSMEs is lower than other business enterprises

0.726

loss carried forward:

 The government of Ethiopia charged a lower tax rate for encouraging MSME

0.947

 Our enterprise granted Loss carry forward by the government

0.948

 A loss carry forward refers to an accounting technique that applies the current year's net operating loss (NOL) to future years' net income to reduce tax liability

0.944

 A tax loss carry forward allows taxpayers to use a taxable loss in the current period and apply it to a future tax period

0.948

 Government Provides to use a tax loss carry forward for several different purposes

0.944

 The loss of income in the current year cannot be carried forward if an ITR reporting the loss has not been filed within the due date

0.947

Tax exemptions

 A tax exemption is the right to exclude all or some income from taxation by federal or states governments

0.947

 I believe that tax exemption boosts our business sustainability

0.948

 Tax exemption MSMEs is helpful to increase retained profits for reinvestment purposes

0.947

 Tax incentives can have both positive and negative impacts on an economy

0.948