Multiple taxation and performance of small and medium enterprises in South East Nigeria

Abstract

Numerous academics have published works on the impact of multiple taxes on SMEs’ performance nationwide, as taxes are essential to economic growth. However, no research has been conducted in South-East Nigeria in particular, given the region’s high level of SME activity. Understanding multiple taxation is essential because it directly affects business well-being and overall economic stability. The proxies for multiple taxation are the consumption tax, the business premises registration tax, and the sales tax. Proxies for performance include sales volume, profitability, and sustainability. The target population is 1,842. This comprised all registered small and medium-scale business enterprises in South East Nigeria. A sample size of 319 was determined using the Krejcie and Morgan table. The analysis was done using a non-parametric method. The findings revealed that consumption tax, premises registration tax, and sales have a negative and significant effect on the sales volume, profitability, and sustainability of SMEs (coefficient = -8.507 and P-value = 0.001; coefficient = -10.948 and P-value = 0.001; coefficient = -12.122 and P-value = 0.001), all at a 5% significance level. The finding carries profound policy implications, especially for Nigeria, where SMEs are the backbone of employment and innovation. The study has contributed to knowledge by helping policymakers understand the impact of multiple taxation on SMEs’ performance. The findings will help policymakers streamline tax systems to eliminate overlapping levies and create a unified tax framework that clearly defines which authority collects what, as there are too many tax collectors with different names in the business environment.