Tax Reforms and Operating Performance among Small and Medium Businesses in Delta State, Nigeria

Abstract

The association between tax reform and operational performance of Small and Medium Businesses in Delta State, Nigeria was examined, aimed to examine the effect of tax incentives on employee productivity, determine the effect of the reduction of multiple taxation on employee welfare, assess the effect of tax simplification and compliance reforms on customer satisfaction, and evaluate the effect of tax education and awareness programmes on innovative capacity. The work adopted a survey research design. A sample of 400 respondents, comprising owners and managers of SMEs across the three senatorial districts of Delta State, was drawn using Cochran's formula and a multi-stage stratified random sampling technique. Data were collected with the aid of a structured questionnaire and analysed using descriptive statistics and simple linear regression. The outcomes demonstrated that tax incentives had a significant positive effect on employee productivity, the reduction of multiple taxation had a significant positive effect on employee welfare, tax simplification and compliance reforms had a significant positive effect on customer satisfaction, and tax education and awareness programmes had a significant positive effect on innovative capacity. The study concluded that tax reforms exert a statistically significant favourable influence on the operational performance of studied SMEs, and that operational performance is a legitimate and policy-relevant outcome of tax reform that should not be overlooked in evaluations focused solely on financial or revenue-based indicators. From the research outcomes, it was recommended that authorities should widely publicise tax incentive schemes, and eradicate multiple taxation structures.

Keywords: Tax Reform, employee productivity, Tax Incentives, multiple Taxation.