EFFECT OF PAY-AS-YOU-EARN AND COMPANY INCOME TAX ON PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN SOUTHWEST NIGERIA

Small and Medium Enterprises have always been considered an important force for economic development and industrialization in smaller economies.These small enterprises have increasingly been recognized as enterprises that contribute considerably to the creation of jobs, economic growth and eradication of poverty in any developing or developed economy. The study is to examined the effect of multiple taxations on performance of SMEs in southwest Nigeria. Secondary data sources were used, Data on SME variables was specifically extracted from published Central Bank of Nigeria Bulletin 2023. The study found that Pay-As-You-Earn and Company Income Tax have a positive and insignificant effect on Small and Medium Enterprises (SMEs) in Nigeria, while Value Added Tax (VAT) has a negative and insignificant effect on SME performance. Multiple taxation was found to increase performance. The study concluded that multiple taxation significantly impacts the performance of Nigerian SMEs. Effective tax management leads to higher performance, as SMEs with higher investment capital rely on their own capital for asset growth, reducing reliance on expensive external funding, resulting in higher profitability. However, size does not support significant economies of scale. The study recommend that SMEs should promote value-added tax, implement robust accounting systems, stay updated with VAT rules, research VAT reliefs, ensure accurate invoices, set aside funds for PAYE obligations, and invest in payroll software. KEYWORD: Pay-As-You-Earn, Small and Medium Enterprises,Value Added Tax.