This study examined the relationship between e-taxation and the financial performance of small and medium enterprises (SMEs) in Kikuubo, Kampala, Uganda. Using a descriptive correlational research design and a quantitative approach, data were collected from 120 SME operators through structured questionnaires. The study operationalised e-taxation through e-registration adoption, e-filing usage, and e-payment utilisation, and measured financial performance through tax compliance rates, revenue growth, and cost efficiency. Results indicated that all e-taxation dimensions were positively and significantly correlated with financial performance (r ranging from .621 to .687, p < .001). Multiple regression analysis showed that e-taxation dimensions collectively explain 66.3% of the variance in financial performance (R² = .663, F(4,115) = 56.47, p < .001), with tax compliance rate being the strongest predictor (β = .368, p < .001). The study concludes that e-taxation significantly enhances SME financial performance through improved compliance, cost savings, and revenue transparency. Recommendations include scaling up URA's e-tax awareness campaigns, providing technology access support to SMEs, and simplifying the e-filing interface.