TAX POLICY AND SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA

ABSTRACT

The study examined tax policy and small and medium scale enterprises in Nigeria. Three specific research questions was raised for the study, which are; what are the effect of tax policy on small and medium-scale businesses (SMEs) in Nigeria? what are the challenges of small and mediumscale businesses (SMEs) in Nigeria face in complying with tax policy? and what are the potential strategies to simplify tax policy on small and medium-scale businesses (SMEs) in Nigeria?. The population for this research would consist of individual taxpayers, businesses, and other relevant organisations operating in four Nigerian states: Edo, Delta, Ondo, and Ogun. However, the study was limited to SMEs in the Egor Local Government Area, with a particular emphasis on their tax payment practices. According to the 2024 field study, there are around 11,897 SMEs in Edo State alone. The sample size was 99.2 of the total population, using Taro Yamane formula. Which was the lower number of responses from the respondents to maintain a 90% confidence interval, and was approximated to 100. The primary data collected through the questionnaire that was designed for his project were analysed with descriptive statistics. The study findings indicate that current tax policies and their administration are seen as significant barriers to the growth, profitability, and sustainability of SMEs in Nigeria. And there is a clear need for simplification of tax procedures, better education and training programs, and more collaboration between SMEs and government agencies to create a more supportive tax environment. These steps are crucial to enhance the competitiveness and overall health of the SME sector in Nigeria.