Evaluating the Impact of Multiple Taxation on the Financial Performance and Compliance Behavior of Small and Medium Enterprises (SMEs) in Nigeria

The proliferation of taxes and levies across federal, state, and local governments in Nigeria has intensified fiscal pressure on Small and Medium Enterprises (SMEs), a critical sector that contributes significantly to employment and national income. This study investigates the impact of multiple taxation on the financial performance and tax compliance behavior of SMEs in Nigeria. Utilizing a descriptive and causal research design, primary data were collected from 400 SMEs across five states using structured questionnaires and analyzed with multiple and logistic regression models. The findings reveal a statistically significant negative relationship between multiple taxation and SME financial performance, as well as a strong inverse link between tax multiplicity and tax compliance. The study confirms that uncoordinated and excessive tax burdens reduce profitability, discourage business reinvestment, and increase the likelihood of non-compliance. The paper recommends a harmonized tax structure, enhanced taxpayer education, and the establishment of a single-window tax administration platform to promote SME growth and fiscal sustainability. These findings have significant policy implications for reforming Nigeria’s tax landscape toward equity and economic development.