Tax System, Incentives and Business Continuity of Small and Medium Enterprises in Nigeria

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dc.contributor.authorMatthew Kunle OLAWALE
dc.date.accessioned2026-01-28T09:23:48Z
dc.date.available2026-01-28T09:23:48Z
dc.date.issued2025-12
dc.description.abstractIn Nigeria, tax takes significant portion of firm profit and has the potential to reduce firm ability to grow and in worst case end existence of SMEs. To support SMEs, Government introduced tax incentives and modified tax system but it seems not to end the problems bedeviling SMEs. In the light of this, the study examined Tax System, Incentives and Business Continuity of SMEs in Nigeria. Specifically, the objective of the study investigated the impact of tax policy and incentives on continuity of SMEs in Nigeria. The study leveraged on Normative theory. The theory established an understanding of the impact of tax structures and incentives on the continuity and development of SMEs that is profoundly relevant. A descriptive research design was adopted for this study. The study focused on the registered SMEs owners and operators in the four Major State in Nigeria which are: Lagos, Kano, Port- Harcourt and Abuja with significant numbers of registered SMEs and operators. The study adopted a stratify random sampling technique. A sample of (n=394) SMEs were determined from a total of (Ni = 25,661) in the states, using Taro Yamane (1967) formula. This study relied on primary data which were gathered through structured questionnaires containing closed ended questions so as to ensures that the respondents are restricted to certain categories in their responses. The data were collected through e-survey (i.e., google form). The reliability coefficient of research instrument is 0.730>0.70 which indicated that the questions are reliable. Four hypotheses were tested in the study using regression and ANOVA, as well as correlation Analysis. The findings revealed that there is positive and significant relationship between Tax System, Incentives and Business Continuity of SMEs in Nigeria; The study also indicated that the application of tax holiday benefits has a meaningful positive contribution to SME survival in Nigeria. In addition, tax holidays offer SMEs temporary alleviation from tax liabilities, which enables them to put the reduced costs back into their businesses. The result of the regression analysis carried out by the study indicated that the coefficient for tax holiday incentives is 1.086. This implies that for every unit increase in tax holiday incentives, SME continuity improves by 1.086 units. The study therefore recommended that tax authorities need to hold specific trainings and workshops for SMEs so that they are educated on their tax obligations and the various tax incentives offered to them; consider expanding the coverage of capital allowance incentives to include newly emerging sectors such as Information Technology, renewable energy, and service sector in other to enable these sectors grow very fast and be suitable for incentives to lower operational costs in order to make them competitive both locally and internationally; Policymakers should initiate longer tax holiday periods for startups in technology, manufacturing, and agriculture where growth potential is deemed to be higher; It was suggested that future studies should examine the relationship between tax incentives and other contextual factors, including financing, regulations, and infrastructure, that influence the growth of SMEs in Nigeria and other emerging economies. Keywords: Tax System, Tax Incentives, Business Continuity of SMEs, Tax Policy, Tax holiday Incentives Word Count: 500
dc.identifier.citationkate Turabian
dc.identifier.otherP.hD
dc.identifier.urihttps://repository.lcu.edu.ng/handle/123456789/1261
dc.language.isoen
dc.publisherLead City University, Ibadan
dc.relation.ispartofseriesP.hD
dc.subjectTax System
dc.subjectTax Incentives
dc.subjectBusiness Continuity of SMEs
dc.subjectTax Policy
dc.subjectTax holiday Incentives
dc.titleTax System, Incentives and Business Continuity of Small and Medium Enterprises in Nigeria
dc.typeThesis

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