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Global Online Journal of Academic Research (GOJAR), Vol. 2, No. 4 Sep-Oct 2023 

 

 

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The Impact of Multiple Taxation on the Efficiency of Selected 

SMEs in Enugu State, Nigeria 

 

By 

Anthonia Onyinye Ilodigwe 

 

 

 

Abstract 

Small and Medium-sized Enterprises (SMEs) are entities that contribute to the overall 

growth and economic development of a country. However, multiple taxation has been 

found to hinder the production activities as well as the efficiency of SMEs. This study 

investigated the impact of multiple taxation on the efficiency of selected SMEs in 

Enugu State, Nigeria. The study was based on three objectives and two hypotheses. 

The study is a survey and made use of questionnaire schedule. The population of the 

study was 17,498 registered SMEs from which 204 were selected as sample using 

Taro Yamane statistical formula. Statistical Package for Social Sciences (SPSS) was 

used to process the data collected for the study. Data analysis was done using 

descriptive statistics (frequency tables and Chi-square inferential statistics were used 

to test the study hypotheses). Result from the study showed that multiple taxation 

makes it difficult for SMEs to carry out their production activities; it also reduces 

SMEs production and service-rendering capacity. The study also found that multiple 

taxation makes management of SMEs more difficult. Based on the findings of the 

study, it was recommended that government adopting a single tax system that levy 

SMEs based on how they earn and using the taxes for the benefit of SMEs will reduce 

the problems of multiple taxation that affect the production and management 

efficiency of SMEs in Enugu State. 

Keywords: SMEs, taxation, multiple taxation, efficiency 

 

Introduction 

Tax is a levy which is a source of income to governments of various countries. 

Tax is levied on the citizens of a country, their possessions or businesses 

mainly for the country or state to generate income for government expenditures 

and the economic and social development of that country or state (Mieseigha & 

Ihenyen, 2014). Multiple taxation refers to the situation where the same income 

or economic activity is subject to taxation by multiple taxing authorities or at 



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various stages of production and distribution (Oseni, 2014). The history of 

multiple taxation is a complex one, with various forms of taxation emerging 

and evolving over centuries. 

In ancient civilizations, such as Egypt, Greece, and Rome, taxes were levied on 

land, trade, and individuals. Multiple taxes were common even then, with 

different rulers and regions imposing their own taxes. Also, during the feudal 

era, landowners often imposed multiple taxes on peasants. These taxes 

included rent, tithes to the church, and various feudal obligations, leading to a 

heavy burden on the common people (Nigamaev, Gapsalamov, Akhmetshin, 

Pavlyuk, Prodanova & Savchenkova, 2018). During the colonial period, 

European colonial powers imposed various taxes on their colonies, leading to 

multiple forms of taxation. These included trade tariffs, export duties, and taxes 

on indigenous populations. The rise of industry in the 18th and 19th centuries 

also led to the introduction of new forms of taxation, such as income taxes. 

Multiple taxes on income, property, and goods emerged in many countries 

(Bush & Maltby, 2004; Cseh &Varga, 2020). 

In the 20th century, especially with the expansion of the welfare state and 

globalization, tax systems have become even more intricate as multiple layers 

of government (local, state, federal) often impose taxes on income, property, 

sales, and more. Additionally, international taxation treaties and agreements 

have also added complexity to taxation. Also, the rise of the digital economy 

and multinational corporations has created challenges in terms of taxation and 

multiple jurisdictions seek to tax digital services and global profits, leading to 

debates about fair and effective taxation. 

The exact beginning of different taxes in Nigeria is somewhat dark. 

Notwithstanding, Izedonmi (2010) noticed that numerous tax assessments 

turned out to be more articulated and pervasive in the last part of the 1980s, 

which coincided with the period when incomes accruable to both the state and 

local governments from the central federal authority began to continuously 

decline. That development drove a few state legislatures and numerous local 

legislatures to look for ways of generating revenues internally, which made a 

great deal of them to resort to intoducing a variety of taxes (Oboh, Yeye and 

Filibus, 2013). Multiple taxation has permeated various businesses and 

industries in Nigeria and SMEs, which make up most of the business 

endeavours in the Nigerian economy, are not exempted.  

Small and Medium-sized Enterprises (SMEs) are businesses that fall within a 

certain range in terms of their employee count, revenue, or assets (Agwu, 

2014). The specific criteria for classifying a business as an SME can vary by 

country and industry but, generally, they are smaller than large corporations 

but larger than micro-enterprises. 



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SMEs play a significant role in many economies, contributing to job creation 

and economic growth. In fact, SMEs are the major contributors to the world's 

economic growth because they are numerous and can be found in almost every 

corner of many countries and states. Despite their contributions, SMEs are 

often faced with unique challenges, the kind of problems larger businesses may 

not be confronted with. In Enugu state, SMEs abound and are known to 

encounter lots of difficulties, including financial, political and social ones. 

However, multiple taxation is a factor that has been found to affect SMEs 

across many countries in the world, Nigeria inclusive, and this study aims to 

find out the impact of multiple taxation on the efficiency of selected SMEs in 

Enugu State. 

Statement of the Problem 

It is in acknowledgment of the vital role of SMEs in the growth of Nigeria’s 

economy that various administrations have been offering incentives to boost 

SME activities in the country. These notwithstanding, there still remain 

impediments to the development of SMEs across the country as many of them 

fold up within the first three years of their start up (Lawal & Aduku, 2016). 

Momoh (2017) observed that over 75% of SMEs in Nigeria die in infancy, not 

surviving beyond their 4th anniversary due to myriad of challenges that cannot 

be remedied by the operations in the sector. Recognizing one of these key 

difficulties, Kaigama (2016) found that various duty forced on SMEs is a main 

cause of the early collapse of these organizations in Nigeria as taxes, both legal 

and illegal, continue to take a large chunk of their earnings.  

Paying multiple tax and other levies dwindle earnings by SMEs, and this 

adversely affects the general activities of SMEs as income gained by SMEs 

largely account for the day-to-day running of their business; it determines their 

ability to carry out customer demands as well as maintain or expand their 

production and service rendering capacity. These are some of the problems 

associated with multiple taxation facing SMEs that necessitated this study’s 

enquiry into the impact of multiple taxation on the efficiency of selected SMEs 

in Enugu State. 

Research Questions 

The following research questions were asked to guide this study. 

1. What are the various forms of taxes paid by SMEs in Enugu State? 

2. What is the impact of multiple taxation on the production efficiency of 

SMEs in Enugu State? 

3. What is the impact of multiple taxation on management efficiency of 

SMEs in Enugu State? 

4. How can multiple taxation problems of SMEs be curbed in Enugu State? 



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Research Objectives 

The general objective of this study is to investigate the impact of multiple 

taxation on the efficiency of selected SMEs in Enugu. Specifically, the study 

aims to 

1. Find out the various forms of taxes paid by SMEs in Enugu State. 

2. Investigate the impact of multiple taxation on the production capacity 

of SMEs in Enugu State. 

3. Ascertain the impact of multiple taxation on management efficiency of 

SMEs in Enugu State. 

4. Find out how multiple taxation problems of SMEs can be curbed in 

Enugu State. 

Research Hypotheses 

The following hypotheses were stated and tested in this study. 

1. There is no significant relationship between multiple taxation and 

production efficiency of SMEs in Enugu State. 

2. There is no significant relationship between multiple taxation and 

management efficiency in Enugu State. 

Literature Review 

Review of Conceptual Literature 

Concept of SMEs 

The definition of SMEs varies in contexts, according to authors and by 

countries where these SMEs are found. In Britain for instance, SMEs are 

defined as enterprises with annual turnover of 2 million pounds or less with 

fewer than 200 paid employees. In Japan SMEs are seen as businesses with 100 

million yen paid up capital and 300 employees (Ekpeyong & Nyong, 1992). In 

Nigeria, SMEs are defined by the Central Bank of Nigeria (CBN) as those 

businesses with small number of employees of between 1-100 for small sized 

businesses and up to 500 or more for medium sized companies. The CBN also 

defined SMEs as businesses with turnover of less than N100 million per annum 

and/or less than 300 employees and having capital investment not exceeding 

N2 million (excluding the cost of land) or a minimum of N5 million naira 

(Ilemona, Nwite and Oyedokun, 2019). 

Concept of Multiple Taxation 

In simple terms, multiple taxation refers to a situation where an individual, 

business entity or organisation is levied more than once on their income. 

According to Folayin (2015), multiple taxation is a situation where a tax payer 



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is forced by two or more levels of government to pay either the same or similar 

taxes in a desperate bid to increase their revenue base. Abiola (2016) further 

define multiple taxation as a situation where the same level of government 

imposes two or more taxes on the same base while Adum (2018) described 

multiple taxation as a case where profit or wealth of an individual, enterprise or 

corporate body is levied more than once. 

According to Izedonmi (2010), multiple taxation is said to have occurred when 

the same income is subjected to more than one tax payment. Multiple taxation 

may not necessarily be by a single body, agency or government but the major 

characteristic of multiple taxation is that a particular income is taxed more than 

once. 

Problems Associated with Multiple Taxation of SMEs 

Multiple taxation of SMEs can significantly affect their efficiency and 

competitiveness. There have been issues associated with multiple taxation 

pointed out by scholars on SMEs and these problems have affected their 

viability and overall contribution to national economic growth and 

development. 

SMEs often have limited resources, and dealing with multiple taxes at different 

levels of government (local, state, and national) can be administratively 

burdensome. This diverts their time and resources away from core business 

activities (Ademola and Ene, 2009). Also, as a result of multiple taxation, 

SMEs must allocate a significant portion of their budget to comply with 

various tax regulations and this can reduce their overall efficiency and 

profitability (Momoh, 2017). 

In another vein, Fatai (2015) opined that multiple taxation systems can lead to 

cash flow challenges for SMEs as they may need to pay various taxes at 

different times, affecting their ability to manage working capital effectively. 

Thus, high tax burdens can discourage SMEs from making investments in their 

businesses. This can impede their growth and expansion, limiting their 

potential to create jobs and contribute to economic development (Okolo et. al. 

2016). 

Theoretical Framework 

Ability to Pay Theory  

Ability to pay theory was propounded by Pigou (1877–1958). The main 

assumption of the theory is that taxpayers in a country should pay taxes based 

on their ability (Onyeukwu, Ihendinihu, & Nwachukwu, 2021). This theory 

seems to be just and equitable as it considers the potential capacity of an 

individual taxpayer before a tax is levied.  This theory is closely linked to the 



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principles of fairness and equity in taxation. The ability to pay theory supports 

progressive taxation systems where individuals and organization with higher 

incomes pay a larger percentage of their income in taxes and those with lower 

income pays a lower percentage of their income in taxes. This approach aims to 

distribute economic resources and the tax burden more equitably, with those 

who can afford to contribute more doing so. Overall, the "ability to pay" theory 

aims to create a tax system that takes into account an individual's or entity's 

financial capacity to contribute to the common good while promoting 

economic fairness and social stability. 

As regards the effect of multiple taxations on the efficiency of SMEs, this 

theory is relevant as it creates a balance between the taxation of large 

enterprises and SMEs. It implies that tax levied on both SMEs and large 

businesses should vary and be based on the ability to pay. On the other hand, if 

SMEs are taxed on multiple occasions and unfairly, they would find it difficult 

to pay, and their enterprise will suffer, which may lead to inefficiency and 

closures (Okolo et al, 2016). 

Empirical Literatures 

Okolo, Okpalaojiego and Okolo (2016) examined the effect of multiple 

taxation on 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 SMEs in Enugu pay 

taxes to more than three agencies. The study also 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. 

Adewara, et. al. (2023) examined the effect of multiple taxations on the 

financial performance of SMEs in Ekiti State, Nigeria. The study used a survey 

research method and analyzed it with correlation coupled with multiple 

regression analysis. The population comprises all registered and functional 

SMEs located in Ado Ekiti, Nigeria, that have been in existence for over 5 

years with valid proof of tax payment. The results found that multiple tax 

burdens and multiple tax administrations exhibited a significant negative 

relationship with the financial performance of SMEs in Ekiti State, Nigeria, 



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while the ability to pay tax revealed a significant positive relationship. From 

the aforementioned results, it was concluded that multiple taxes served as a 

worm that deeply reduced the investment potential of SMEs and invariably 

affected the chunk of revenue generated by the sector in the state. It was 

therefore suggested that the Joint Tax Board in the state and other institutions 

responsible for multiple tax management should awaken to their functions and 

harmonize all government revenue to prevent the occurrence of multiple taxes 

from causing a burden and hindering the survival of SMEs in the state. 

Adeniyi and Imade (2018) looked at the implication of multiple taxations in 

achieving sustainable development among the small enterprises domiciled in 

Lagos state, Nigeria. The study looked at the burdens of multiple taxes and the 

administrative influence of multiple taxes on small-scale enterprises’ 

performance. Questionnaires distributed among target SMEs in Lagos State 

were employed using percentages and ANOVA techniques. The outcome of 

the findings revealed that both burdens of multiple taxes and the administrative 

influence of multiple taxes significantly influence small-scale enterprises’ 

performance in Lagos State, Nigeria. 

Ocheni and Gemade (2015) carried out a study that investigated the effects of 

multiple taxation on the performance of small and medium scale business 

enterprises in Benue State. The study also examined the effect of multiple 

taxation on SMEs’ survival. The study involves a survey research design with a 

population of 91. The researchers derived their sample size to arrive at 74 and a 

self-administered questionnaire was used to collect data. This data was 

quantitatively analyzed with simple percentages and the research hypotheses 

were tested with ANOVA. Findings revealed that multiple taxation has 

negative effect on SMEs’ survival and the relationship between SMEs’ size 

and its ability to pay taxes is significant. The research, therefore, recommends 

that government should come up with uniform tax policies that will favour the 

development of SMEs in Nigeria and government should put into consideration 

the size of SMEs when formulating tax policies. 

Aluko et al. (2022) assessed the effect of tax incentives on the liquidity 

performance of quoted manufacturing firms in the Nigeria Exchange Group. 

The study used an expo-facto research design, and the population of the study 

comprised 18 industrial goods firms listed in the Nigeria Exchange Group from 

2012 to 2021. The sample size of 10 firms was selected through a purposive 

sampling technique. The data for the study was obtained from secondary 

sources through the published financial statements of the companies. Data were 

analyzed through descriptive and inferential statistics. The result from the 

analysis of data revealed that tax savings had a significant and positive effect 

on the liquidity performance of companies. The findings from the study also 



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revealed that tax holiday has a negative and insignificant effect on companies' 

liquidity performance. 

Using selected firms that engaged in hospitality services in Abia State, 

Onyeukwu et al. (2021) looked at how their financial performance is being 

affected by multiple taxations. Its study aimed at analyzing whether multiple 

taxes hinder the survival and growth of selected firms in the state. Data were 

gathered through a questionnaire and analyzed with multiple regression 

estimation techniques. The findings revealed that multiple taxations 

represented by non-statutory fees significantly influence the performance of the 

firm.  

Nyong (2021) investigated the outcome of multiple taxations on the growing 

status of SMEs in Nigeria. Secondary data were obtained from selected SMEs 

of the state and analyzed with regression analysis estimation techniques. It was 

discovered that tenement rate, refuse disposal, business permit fee, 

signpost/advert fee, and development levy did not influence the growth 

prospect of SMEs in Nigeria. 

Methodology 

Research Design 

This study is a survey research design. Survey research design is a research 

design that makes use of primary method for data collection to gather 

information needed for a study from a sample of a given population (Avedian, 

2014). This study thus made use of quantitative instrument (questionnaire) in 

collecting data from the population of the study. 

Area of Study 

The area of the study is Enugu state. Enugu State is located in South Eastern 

Nigeria. It is located at 6°30′N 7°30′E of the equator. The state is bordered on 

the north by Benue and Kogi States, bordered on the east by Ebonyi State, 

bothered by Abia State on the south, and Anambra State to the west. Enugu is 

known for the production of agricultural products such as yam, cocoyam, 

groundnuts, palm oil, maize, beans, and cassava, among others. The state also 

hosts lots of manufacturing and service rendering firms – large, medium and 

small. The presence of many SMEs in the area made it suitable for the present 

study. 

Population of the Study 

According to National Bureau of Statistics (NBS) and Small and Medium 

Enterprises Development Agency of Nigeria (SMEDAN, 2013), there are 

seventeen thousand four hundred and ninety-eight (17,498) registered SMEs in 



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Enugu State. 

Sample Size 

The sample size for the study was estimated using Taro Yamane statistical 

formula. The formula is stated thus: 

 

 
 
 

Where n = sample size sought 

N= population size 

1= constant 

e = degree of error (0.07) 

 

Therefore, 

 

n = 17498 

 1+17498(0.07)2 

 

n = 17498 

 1+17498(0.0049) 

 

n = 17498 

 85.7451 
 

 n = 204.06 (Approx. 204). 

This study was conducted using 204 registered SMEs across various local 

government areas in the state. The population for the study was made up of 204 

managers and CEOs of the 204 selected SMEs. 

Method of Data Analysis 

Statistical Package for the Social Sciences (SPSS) was used to process the data 

collected from the field. The data collected for the study were analysed using 

descriptive statistics and presented in frequency tables, chart and graphs. The 

stated hypotheses were tested using Chi-square inferential statistics at 0.05 

level of significance. 

Data Presentation and Analysis 

In this section, the data gotten from the field were analysed and presented. The 

research questions and objectives were first analysed after which the study 

hypotheses were tested. 



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Research Question 1: What are the various forms of taxes paid by SMEs in 

Enugu State? 

 

Table 1: Taxes Paid by SMEs in Enugu State 

 
 

Table 1 shows that there are several taxes paid by SMEs in Enugu State. And 

these include Corporate Tax, Value Added Tax, Stamp duty, Industrial trading 

fund tax, capital gain tax and other taxes and levy. However, the major taxes 

paid by majority of the SMEs are Corporate Tax (69.1%), Capital gain tax 

(52.9%), Company income tax (50%) and other taxes (57.8%). 

 

Table 2: Number of Agencies SMEs pay tax to in Enugu State 

 
Source: SPSS version 25 

 

Table 2 shows the responses given by respondents when asked the number of 

agencies they pay taxes to. Data from the table shows that 17.16% of the 

respondents indicated more than three agencies, 32.64% of the respondents 

indicated three, 45.59% of the respondents indicated two while 4.41% 

indicated one. This result means that majority of SMEs in Enugu pay tax to 

three or more agencies. 

 



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Research Question 2: What is the impact of multiple taxation on the 

production efficiency of SMEs in Enugu State? 

 

Table 3: Respondents' levels of agreement on whether multiple taxation 

makes it difficult to carry out production activities 

 
Source: SPSS version 25 

 

Table 3 shows that 50.00% of the respondents strongly agreed that multiple 

taxation makes it difficult for their enterprise to carry out production activities 

and 35.78% of the respondents agreed that multiple taxation makes it difficult 

for their enterprise to carry out production activities. On the other hand, 4.91% 

of the respondents disagreed that multiple taxation makes it difficult to carry 

out production activities while 9.31% of the respondents strongly disagreed 

that multiple taxation makes it difficult to carry out production activities. This 

result implies that majority of the respondents strongly agreed that multiple 

taxation makes it difficult for SMEs to carry out their production activities. 

 

Table 4:  Respondents' levels of agreement on whether multiple taxation 

affects the quality of products and services 

 
Source: SPSS version 25 

 

Table 4 shows that 16.18% of the study respondents strongly agreed that 

multiple taxation affects the quality of their products and services and 20.09% 

agreed that multiple taxation affects the quality of products and services. On 

the other hand, 19.12% of the respondents disagreed that multiple taxation 

affects the quality of products and services while 44.61% of the respondents 

which is the majority strongly disagreed that multiple taxation affects the 

quality of products and services. This implies that majority of SMEs’ products 

and services quality in Enugu State is not affected by multiple taxation. 

 

 

 



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Table 5: Respondents' levels of agreement on whether multiple taxation 

reduces production and service rendering capacity of SMEs 

 
Source: SPSS version 25 

 

Table 5 shows that 29.90% of the respondents strongly agreed that multiple 

taxation reduces their enterprise production and service rendering capacity, 

47.06% agreed that multiple taxation reduces their enterprise production and 

service rendering capacity, 15.69% disagreed that multiple taxation reduces 

their enterprise production and service rendering capacity while 7.35% of the 

respondents strongly disagreed that multiple taxation reduces their enterprise 

production and service rendering capacity. The result in table 5 implies that 

majority of the respondents agreed that SMEs production and service rendering 

capacity is reduced by multiple taxation in Enugu State. 

 

Table 6: Respondents' views on the production efficiency of their 

enterprise 

 
Table 6 shows the responses given by respondents on the efficiency of their 

enterprise. Data presented in the table show that 38.25% of the respondents 

indicated that their enterprise is very efficient, 45.10% of the respondents 

indicated that their enterprise is efficient while 16.66% of the respondents 

indicated that their enterprise is not efficient. The result in table 6 shows that 

majority of the respondent agreed that their enterprise is efficient with regards 

to production. 

 

Research Question 3: What is the impact of multiple taxation on management 

efficiency of SMEs in Enugu State? 

 

 



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Table 7: Respondents' level of agreement to whether multiple taxation 

affects the day-to-day coordination of SMEs 

 

 
Source: SPSS version 25 

 

Table 7 shows that 10.78% of the respondents strongly agreed that multiple 

taxation affects the day-to-day coordination of SMEs, 13.73% of the 

respondents agreed that multiple taxation affects the day-to-day coordination of 

SMEs, 46.08% of the respondents disagreed that multiple taxation affects the 

day-to-day coordination of SMEs while 25.49% of the respondent strongly 

disagreed that multiple taxation affects the day-to-day coordination of SMEs. 

Data in table 7 shows a high level of disagreement by respondents which is an 

indication that multiple taxation does not affect the day-to-day coordination of 

SMEs in Enugu State. 

 

Table 8: Respondents' views on whether multiple taxation makes 

management of enterprise more difficult 

 
Source: SPSS version 25 

 

Data in table 8 show that 49.02% of the respondents strongly agreed that 

multiple taxation makes management of their enterprise more difficult and 

16.66% of the respondents agreed that multiple taxation makes management of 

their enterprise more difficult. On the other hand, 21.08% of the respondents 

disagreed that multiple taxation makes management of their enterprise more 

difficult while 13.24% of the respondents strongly disagreed that multiple 

taxation makes management of their enterprise more difficult. Data presented 

in table 8 show that there is strong level of agreement among the study 

respondents that multiple taxation makes management of SMEs more difficult 

in Enugu State. 
 

 



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Table 9: Respondents' views on the management efficiency of their 

enterprise 

 
Source: SPSS version 25 

 

Table 9 shows the level of efficiency among SMEs in Enugu State. Data in the 

table show that 75.00% of the respondents indicated that their management is 

very efficient, 14.22% indicated that their management is efficient while 

10.78% of the respondents indicated that the management of their enterprise is 

not efficient. By implication, majority of the respondents agreed that the 

management of their enterprise is efficient. 

 

Research Question 4: How can multiple taxation problems of SMEs be 

curbed in Enugu State? 
 

Table 10: Respondents' levels of agreement on whether adopting single tax 

system can curb SMEs multiple taxation problems 

 
Source: SPSS version 25 

 

Table 10 shows that 35.78% of the respondents strongly agreed that adopting 

single tax system can curb SMEs multiple taxation problems, 50.00% of the 

respondents agreed that adopting single tax system can curb SMEs multiple 

taxation problems, 9.80% of the respondents disagreed that adopting single tax 

system can curb SMEs multiple taxation problems while 4.41% of the 

respondents strongly disagreed that adopting single tax system can curb SMEs 

multiple taxation problems. Data in table 10 show that there is a strong 

agreement among respondents that adopting single tax system can curb SMEs 

multiple taxation problems. 
 

Table 11: Respondents' levels of agreement on whether taxing SMEs as 

they earn can curb multiple taxation problems 

 
 



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Table 11 shows respondents’ level of agreement when asked whether taxing 

SMEs as they earn can curb multiple taxation problems. Data from the table 

shows that 44.61% of the respondents strongly agreed that taxing SMEs as they 

earn can curb multiple taxation problems while 39.22% of the respondents 

agreed that taxing SMEs as they earn can curb multiple taxation problems. On 

the other hand, 7.35% of the respondents disagreed that taxing SMEs as they 

earn can curb multiple taxation problems while 8.82% of the respondents 

strongly disagreed that taxing SMEs as they earn can curb multiple taxation 

problems. The implication of data presented in table 11 shows that majority of 

the respondents are in agreement that taxing SMEs as they earn can curb 

multiple taxation problems. 

 

Table 12: Respondents’ level of agreement on whether putting taxes to 

good use to benefit SMEs can eradicate multiple taxation problems 

 
Source: SPSS version 25 

 

Table 12 shows the responses given by respondents when asked whether 

putting taxes to good use to benefit SMEs can eradicate multiple taxation 

problems. Data from the table show that 49.02% of the respondents indicated 

strongly agree, 28.43% of the respondents indicated agree, 16.18% indicated 

disagree while 6.37% of the respondents indicated strongly disagree. This 

result implies that majority of the respondents strongly agreed that putting 

taxes to good use to benefit SMEs can eradicate multiple taxation problems. 

 

Test of Hypotheses 

The hypotheses stated in this study were tested using Chi-square inferential 

statistics with a level of significance of 0.05.  

 

Hypothesis 1: There is no significant relationship between multiple taxation 

and production efficiency of SMEs in Enugu State. 

Data in tables 2 and 6 were crossed to test the first research hypothesis. 

 

 

 

 

 



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Table 13: Test of relationship between multiple taxation and production 

efficiency   

 
x² = 9.164, df = 6, p = .165 
 

Data in table 13 show an x² value of 9.164, degree of freedom (df) of 6 and an 

asymptotic value of .165. Since the asymptotic value is greater that the level of 

significance (0.05), it is an indication that the alternative hypothesis is rejected. 

This implies that there is no significant relationship between multiple taxation 

and production efficiency of SMEs in Enugu State. It can be concluded that 

paying multiple tax does not have impact on the production efficiency of SMEs 

in Enugu State. 
 

Hypothesis 2: There is no significant relationship between multiple taxation 

and management efficiency in Enugu State. 

Data in tables 2 and 9 were crossed to test the second research hypothesis. 
 

Table 14: Test of relationship between multiple taxation and management 

efficiency 

 
 



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x² = 3.170, df = 6, p = .787 

 

Data in table 14 show an x² value of 3.170, degree of freedom (df) of 6 and an 

asymptotic value of .787. Since the asymptotic value is greater that the level of 

significance (0.05), it is an indication that the alternative hypothesis is rejected. 

This implies that there is no significant relationship between multiple taxation 

and management efficiency of SMEs in Enugu State. It can be concluded that 

paying multiple tax does not have impact on the management efficiency of 

SMEs in Enugu State. 
 

Discussion of Findings 

From the analysis of the first research question, it was found that there are 

several taxes paid by SMEs in Enugu State; major taxes paid by majority of the 

SMEs are corporate tax, capital gain tax, company income tax and other taxes. 

It was also found through the first research question that majority of SMEs pay 

taxes to two or more agencies in Enugu state. This finding supports the finding 

of Okolo, Okpalaojiego and Okolo (2016) who found that SMEs in Enugu pay 

tax to more than three agencies.  
 

The second research question asked was to find out the impact of multiple 

taxation on the production efficiency of SMEs in Enugu State. The analysis of 

the second research question showed that multiple taxation makes it difficult 

for SMEs to carry out their production activities. On the other hand, it was also 

found through the second research question that multiple taxation does not 

affect the quality of SMEs’ products and services in Enugu state. However, it 

was found that SMEs’ production and service rendering capacity is reduced by 

multiple taxation in Enugu State. This finding partly supports the findings of 

Adewara, Dagunduro, Falana, and Busayo (2023) who found that multiple 

taxation reduces the investment potential and earnings of SMEs. Thus, the 

more production and service rendering capacity of SMEs are reduced, the more 

their income is reduced. 
 

The third research question asked was to find out the impact of multiple 

taxation on management efficiency of SMEs in Enugu State. Analysis of the 

third research question showed that multiple taxation does not affect the day-

to-day coordination of SMEs in Enugu State but makes management of SMEs 

more difficult. This finding partly supports the findings of Ocheni and Gemade 

(2015) who found that multiple taxation makes the survival of SMEs difficult. 
 

The fourth research question was asked to find out how multiple taxation 

problems of SMEs can be curbed in Enugu State. Analysis of the fourth 

research question showed that adopting single tax system can curb SMEs 

multiple taxation problems. The analysis also showed that taxing SMEs as they 

earn can curb multiple taxation problems. Further, the analysis of the fourth 



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24 
 

research question showed that putting taxes to good use to benefit SMEs can 

eradicate multiple taxation problems. This finding supports the finding of 

Ocheni and Gemade (2015) who found that considering SME size when taxing 

and also putting tax to good use help curb the adverse effect taxation may have 

on SMEs. 
 

The first hypotheses tested found no significant relationship between multiple 

taxation and production efficiency of SMEs in Enugu State. The second 

hypothesis tested also found that paying multiple taxes does not have impact on 

the management efficiency of SMEs in Enugu State. 
 

Conclusion 

The study investigated the impact of multiple taxation on the efficiency of 

selected SMEs in Enugu. From the analysis conducted, the study concluded 

that multiple taxation makes the production of goods and services difficult and 

reduces the production and service rendering capacity of SMEs. The study also 

concludes that multiple taxation also makes management of SMEs more 

difficult. 
 

Recommendations 

Based on the findings of the study, the study recommends that government 

adopting a single tax system that levy SMEs based on how they earn and using 

the taxes for the benefit of SMEs will reduce the challenges of multiple 

taxation problems that affect the production and management efficiency of 

SMEs in Enugu State. 

 

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Author Information: Anthonia Onyinye Ilodigwe is affiliated to 

the Department of Sociology, Chukwuemeka Odumegwu Ojukwu 

University, Igbariam, Anambra State, Nigeria.  

Email: ilodigwetonia@gmail.com 

 

 

 

 

 

 


