Abstract

The study was carried out to find out the impact of taxes on small and medium scale business enterprises in Nigeria. The study aimed at assessing the performance of business enterprises in Nigeria, finding out if tax payers are aware of all their tax obligations, policies and problems affecting them as well as their businesses. The aim is to investigate the extent to which multiple taxes affect the operation of SMEs in the country using expansionary rate of these businesses as surrogate for growth. Data for the study were obtained through responses from questionnaire designed on a five (5) point Likert scale. Out of 193 questionnaires administered on staff and owners of SMEs on Abuja, 131 of them were returned representing approximately 68% response rate. The responses were empirically analysed using non-parametric statistics comprising mean score, standard deviation and z-test. The results suggest that multiple taxes have negatively affected the growth of SMEs in Nigeria as many operators of these businesses expressed their unwillingness to venture into new enterprises or expand the existing ones for fear of multiple taxes that continue to take a significant portion of their earnings. The study recommends that government at all level in the country should address the issue of multiple taxes on SMEs by restricting to collecting only those taxes within their tax jurisdiction as stipulated by law. Further, provision should be made in Nigeria. Tax laws for stiff penalties against any tier of government, tax officials and tax agencies using orthodox, unfriendly and illegal means to enforce multiple taxes on operators of SMEs in Nigeria. The findings revealed the problems faced by the small and medium business men as regards mode of assessment, collection and tax collectors, inefficiency by tax collectors, loss of equipment, loss of sales and loss of stock as a result of taxes. Recommendations on impact of taxes included; improvement on the method of collecting taxes, educating the business community about its different tax rates and introducing a scheme that allows tax payers to pay the tax obligation.

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