IMPACT OF MULTIPLE TAXATION ON THE GROWTH AND SUSTAINABILITY OF SMALL AND MEDIUM SCALE ENTERPRISES IN ONDO STATE, NIGERIA

Abstract

Small and Medium Scale Enterprises (SMEs) support employment, income generation and entrepreneurial development, yet their operations are constrained by overlapping taxes and levies. This study examined the effect of multiple taxation on the growth and sustainability of SMEs in Ondo State, Nigeria. A quantitative descriptive survey design was adopted. Using multistage and stratified sampling, 120 SME owners and managers were selected, while 114 valid questionnaires were analysed, representing a 95% response rate. Data were analysed with frequencies, percentages, means, standard deviations, Pearson correlation and simple linear regression at the 5% significance level. Respondents reported a high multiple-taxation burden, with an overall mean of 4.12. Multiple taxation had a significant negative effect on SME growth (β = -0.682, R² = 0.465, p < 0.001) and sustainability (β = -0.645, R² = 0.416, p < 0.001). It also had a significant negative relationship with overall SME performance (r = -0.671, p < 0.01). The findings show that overlapping taxes increase operating costs, reduce profitability and investment capacity, restrict expansion and employment decisions, weaken financial stability and threaten long-term continuity. The study concludes that uncoordinated taxation undermines SME growth and survival. It recommends harmonised tax administration, fewer duplicative levies, simpler digital procedures, SME-sensitive tax policies, stakeholder consultation, tax education and complementary business support.