NIGERIAN TAX POLICIES AND FINANCIAL SUSTAINABILITY OF SMALL AND MEDIUM SCALE ENTERPRISES IN ANAMBRA STATE
Keywords:
Direct Tax Policy, Financial Sustainability, Indirect Tax Policy, Small and Medium Scale Enterprise, Tax Policy, Tax ReliefAbstract
The study examined the effect of Nigerian tax policies on the sustainability of SMEs in Anambra state, Nigeria. The specific objective was to ascertain the extent to which direct tax policy, indirect tax policy and tax reliefs affect the financial sustainability of SMEs in Anambra state. The study adopted survey research design. The population of the study was 481 registered owners of general service SMEs in Anambra State. The sample size was 218 general service SMEs owners in Anambra state selected using random sampling. Primary data were collected using structured questionnaire. Descriptive analysis was used to analyse the research questions. The hypotheses were tested using multiple regression analysis. The study found that: Direct Tax Policy has a significant negative effect on financial sustainability of SMEs in Anambra state (β = -0.218, p = .001); Indirect Tax Policy has a significant negative effect on financial sustainability of SMEs in Anambra state (β = -0.472, p = .000); Tax Reliefs have a significant positive effect on financial sustainability of SMEs in Anambra state (β = 0.129, p = .038). In conclusion, when businesses receive tax-related financial breathing room, whether through exemptions, holidays, or deductions, they are better positioned to reinvest profits, expand their operations, and improve long-term survival rates. The study recommends that the Anambra State Internal Revenue Service (AIRS) and Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) should work collaboratively to create awareness of tax reliefs and ensure ease of access, and integrate them into broader enterprise support programs for enhanced long-term business survival and reinvestment potential.
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