Effect of Multiple Tax System on The Growth of Small and Medium Scale Enterprises (SMEs) In Nigeria

• Author(s): Abdullahi, Sadiq Kwaltommai ; Shittu Ibrahim Olaipupo ; Lawan Yahaya
• Paper ID: 1710809
• Page: 1197-1208
• Published Date: 23-09-2025
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 9 Issue 3 September-2025

Abstract

The multiple tax system in Nigeria has long been a devastating bane to the growth of Small and Medium Scale Enterprises (SMEs), stifling innovation and survival amid overlapping fiscal burdens. This study examined effects of multiple tax system on SMEs’ growth, aiming to assess whether tax imposition, assessments, payments, and policies significantly influence growth. Grounded in the Ability to Pay Theory, Ibn-Khaldun’s Theory of Taxation, and the Theory of Business Growth, the study adopted a survey design suitable for questionnaire-based data collection. A structured questionnaire, validated through content analysis and reliable with a Cronbach's alpha of 0.827, was administered using to a simple random sample of 274 SMEs from a population of 876. Data were analyzed via Multiple Regression using IBM SPSS version 26. Results revealed p-values of 0.000 for tax imposition, 0.024 for assessments, 0.000 for payments, and 0.001 for policies (all below 0.05) indicating significant negative impacts. Consequently, burdensome impositions erode profitability, inconsistent assessments foster uncertainty, frequent payments drain cash flows, and unfavorable policies deter compliance and entrepreneurship. The study concludes that these elements hinder SMEs performance and reinvestment. Recommendations include streamlining taxes by consolidating overlaps across government levels, implementing uniform assessment criteria for fairness, and establishing a single payment portal to minimize administrative bottlenecks and red tape.

Keywords

Multiple Tax System, SMEs growth, Tax imposition, Tax assessment, Tax payment, Tax policies, Nigeria

Citations

IRE Journals:
Abdullahi, Sadiq Kwaltommai , Shittu Ibrahim Olaipupo , Lawan Yahaya "Effect of Multiple Tax System on The Growth of Small and Medium Scale Enterprises (SMEs) In Nigeria" Iconic Research And Engineering Journals Volume 9 Issue 3 2025 Page 1197-1208

IEEE:
Abdullahi, Sadiq Kwaltommai , Shittu Ibrahim Olaipupo , Lawan Yahaya "Effect of Multiple Tax System on The Growth of Small and Medium Scale Enterprises (SMEs) In Nigeria" Iconic Research And Engineering Journals, 9(3)