IMPACT OF NIGERIAN TAX POLICIES ON THE ECONOMY AND SMALL BUSINESSES IN NIGERIA.

This study examines the impact of Nigerian tax policies on the economy and small businesses, with a view to establishing whether current tax structures support or hinder SME development. The Study identify the challenges of Nigerian tax policies on small businesses; examine the influence of multiple taxation on SMEs and the broader economy; and propose measures for addressing policy gaps to encourage compliance and growth. The study adopted a quantitative research design, utilizing secondary data spanning 2010–2023 sourced from the Federal Inland Revenue Service (FIRS), National Bureau of Statistics (NBS), Central Bank of Nigeria (CBN), and SMEDAN reports. The study population comprised 2,500 registered SMEs in Yola, Adamawa State, from which a sample size of 345 was determined using Yamane’s formula. Census sampling was employed for macroeconomic data, while purposive sampling targeted SMEs across sectors. Data were analyzed using descriptive statistics and multiple regression analysis with SPSS to test hypotheses and establish relationships between Company Income Tax (CIT), Value Added Tax (VAT), Personal Income Tax (PIT), and SME economic performance. The findings revealed that high tax rates, multiple taxation, and weak tax education remain key obstacles for SMEs. However, regression results indicated that when revenues from CIT, VAT, and PIT are efficiently managed and reinvested in infrastructure and supportive programs, they positively influence SME GDP contribution and economic growth. All null hypotheses were rejected, confirming a significant relationship between Nigerian tax policies, small business performance, and national development. Based on these findings, the study recommends the simplification and harmonization of tax administration across federal, state, and local levels to reduce duplication and compliance burdens. It also advocates for stronger tax incentives, improved taxpayer education, and transparent utilization of tax revenues for infrastructure and SME support initiatives. These measures, if effectively implemented, will foster voluntary compliance, strengthen SME resilience, and enhance Nigeria’s long-term economic growth.