Commenced in January 2007
Frequency: Monthly
Edition: International
Paper Count: 30124
Effect of Multiple Taxation on Investments in Small and Medium Enterprises in Enugu State, Nigeria

Authors: Ebere U. Okolo, Eunice C. Okpalaojiego, Chimaobi V. Okolo

Abstract:

Some investors prefer to keep their money in the bank rather than invest in Small and Medium Enterprise (SME) due to the high cost of running small and medium scale enterprise in Enugu State. This cost primarily concerns multiple-taxation, enormous tax burdens, levies and charges. This study examines the effect of multiple-taxation on the investments in SMEs. The study used survey design with SME population of 80. Questionnaire was used to collect data. Simple percentages/frequencies were used to analyze the data and the research hypotheses were tested with ANOVA. It was found that multiple taxation has negative effect on SMEs investment. Furthermore, the relationship between SMEs investment and its ability to pay tax is significant. The researcher recommends that government should develop a tax policy that considers the enhancement of SMEs’ capital allowance when imposing taxes. Government should also consider a tax policy that encourages investment in SMEs by consolidating all taxes in one slot and latter disseminate to various government purses rather than having many closely related but different taxes at the same time.

Keywords: Investments, multiple taxation, small and medium enterprises.

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1123971

Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 5028

References:


[1] Adanis, R. A. (2001). Public Sector Accounting and Finance Made Simple, Lagos: Corporate Publishers Ventures.
[2] Adebisi, J.F. and Gbegi, D.O. (2013). Effect of multiple taxation on the performance of small and medium scale business enterprise. (A study of West African ceramics Ajeokuta, Kogi state.
[3] Asika, N. (1991). Research Methodology in the Behavioral Sciences Lagos: Longman Nigeria PLC. 28P.
[4] Osondu, A.T. (1991). Appraisal of Working Capital Management of Small Firms in Enugu State, University of Nigeria Research Publication. Retrieved from: www.unn.edu.ng/publications/files/OSONDU_A_ 1991_10040.pdf
[5] Fatai, A. (2011). “Small and Medium Scale Enterprises in Nigeria, the Problems and Prospect”, International Journal of Economic Development Research and Investment, Vol 2, No 5, pp 102-125.
[6] Aremu, M. A. and Adeyemi, S. I. (2011). Small and Medium Scale Enterprises as a survival strategy for Employment generation in Nigeria, Journal of Sustainable Development, Vol. 4, No. 1, p200-206.
[7] Taiwo, M., Yusuf B, Ayodeji M, Awoloaja A. (2012). Small and medium enterprises and economic growth in Nigeria. 8(3): 45-53.
[8] Okwo, I. (2012). “Tax collection in Nigeria: A Review of the Performance of Federal Inland Revenue Service”, ESUT Journal Accountancy volume 3, No. 1.
[9] Ademola, A. and Ene, E. (2009). Effects of Tax Incentives on Manufacturing Investment in Nigeria.
[10] Appah, E. (2010). “The Problems of Government Tax Planning and Administration in Nigeria: A Critique” Nigeria Research Journal of accountancy (NRJA) Vol.1 No. 2.
[11] Dike, (2013). Tax System in line with 21st century trend at the JTB International Tax Conference of 29th October, 2013.
[12] Onugu, B. A. N. (2005). “Small and Medium Enterprises in Nigeria: Problems and Prospects”, retrieved from: www.stclementuniversity.com, St Clements University Website, Small and Medium Enterprises Agency of Nigeria.
[13] Taxes and Levies (Approved List for Collection) Act (1998 No. 21.), 30th September, 1998.
[14] Omagor C, Mubiru M. Entrepreneurship: An integrated approach, 1st ed. Kabali and business Books, Kampala; 2008. (Viewed: 2015-04-20).
[15] Balunywa W, Namatovu R, Kyejjusa S, Dawa S. Global Entrepreneurship Monitor (GEM) Uganda Report; 2010. (Viewed: 2014-12-21).
[16] Romer C, Romer D. The Macroeconomic Effects of Tax Changes: Estimates based on a new measure of FiscalShocks; 2010. Available: http://elsa.berkeley.edu/~dromerpapers/RomerandRomerAERJune2010.pdf
[17] Udechukwu, F.N. (2003). Survey of small and medium scale industries and their potentials in Nigeria. Paper presented at the Central Bank of Nigeria seminar on small and medium industries equity investment scheme (SMIEIS). Retrieved from www.cenbank.org/out/Publications/ guidelines/dfd/2004/smieis.pdf
[18] Williams, E.S. (2006). Supporting the growth of small and medium enterprises. Central Bank of Trinidad and Tobago.
[19] Tomlin, B. (2008). Clearing hurdles: key reforms to make small businesses more successful. (Commentary No. 264). Toronto, Ontari C.D. Howe Institute. Retrieved from www.cdhowe.org/pdf/ commentary_264.pdf
[20] Aftab, K. and E. Rahim (1998), “Barriers to the Growth of Informal Sector firm, a case study”, Journal of Development Studies 25(4).
[21] Ekpeyong D. and M.O Nyang (1992), “Small and Medium Scale Enterprises in Nigeria: Their Characteristics, Problems and Sources of Finance”, African Economic Research Consortium, Nairobi.
[22] Ogechukwu Ayozie (2006), The Role of Small Scale Industry in National Development in Nigeria. Texas Corpus Christi, Texas, United States.
[23] Odedokun M.O (1998), “Effectiveness of Selective Credit Policies Alternative Framework of Evaluation” World Development Vol. 16 pp 120-122.
[24] Mike J. (2010), “Small Scale Business in Nigeria”, The Guardian Newspaper, Lagos.
[25] Joshua M. (2008), Small and Medium Scale Business as Instrument of Economic Growth in Nigeria, Lagos: Kinston Publishers.
[26] National Bureau of Statistics (2005), Social Statistics in Nigeria, Abuja: NBS.
[27] Alawe T. (2004), “Entrepreneurship Processes and Small Business Management”, Industrial Science Centre, Owoyemi House, Abeokuta road Sango Otta Ogun state, Nigeria.
[28] Arriyo D (1999), “Small firm are the Backbone of Nigeria economy. Africa Economic Analysis”, Africa Business Information Service, Bridgnorth United Kingdom.
[29] Ihua U. (2009), “SMEs Key Failure-Factor: A Comparism between United Kingdom and Nigeria”, Journal of Social Science 18-(3) 199-207
[30] Nigeria Enterprises Promotion Act No. 3 of 1977.
[31] Ogujiuba, K.K; Ohuche, F.K and A.O Adenuga (2004), “Credit availability to small and medium scale enterprise in Nigeria- and importance of new capital base for banks-background and issues”, Central Bank of Nigeria Bullion.
[32] Ogbonna, C.U. (2015). An Assessment of the Impact of Domestic Investment on Economic Growth in Nigeria.
[33] Iwuji, G.O. (2003). Creating Awareness on Tax Matters for Small and Medium Units (Power Point Slides). Retrieved from: www.doostoc.com
[34] Joulfaian, D., & Rider, M. (1998). Differential taxation and tax evasion by small business. National Tax Journal, 51(4), 676-687.