THE 2025 TAX LAW ON SMALL AND MEDIUM ENTERPRISES IN BAYELSA STATE, NIGERIA

This paper explores the effect of the 2025 Tax Law on Small and Medium Enterprises (SMEs) in Bayelsa State, Nigeria. This fiscal law, arguably, represented a key fiscal reform to broaden the tax base, increase government revenue, among other things; in addition to establishing tax simplification process, tax digital compliance system and common tax administration among others. Little, however, is known about the impact of the tax law on SMEs, who serve as the bedrock of the Nigerian economy. By applying an explanatory cross-sectional survey research design, data were obtained from 320 registered SMEs in different industries within the state. Data were analyzed using multiple regression analysis where tax burden, tax compliance cost, multiple taxation and policy uncertainty were tested on SMEs' performance. The results showed that all the four taxes-related factors have a significant and adverse effect on the profitability, sustainability, expansion and investment performance of SMEs. The study concluded that the 2025 Tax Law, in addition to trying to reduce loopholes in tax administration, had indeed constrained SMEs in Bayelsa State and further recommended that a broad and targeted relief should be granted to SMEs, compliance costs for SMEs should be minimized, harmonization of taxes across different tiers of government, stable tax policy should be enforced and tax administration awareness of SMEs should be raised.