EFFECT OF GOVERNMENT TAX REFORMS ON THE PERFORMANCE OF SMALL BUSINESSES IN NORTH-WEST NIGERIA

This study examines the effect of government tax reforms on the performance of small businesses in North-West Nigeria, with small business performance positioned as the central dependent variable grounded in both global and contextual evidence. Three tax reform dimensions are specifically investigated: tax rate reform, tax incentive reform, and tax administration reform. Motivated by the persistently low tax-to-GDP ratio in Nigeria averaging 6.4% against an OECD average of 34.1% and a Sub-Saharan African average of 16.8% and by the demonstrable negative effects of disproportionate and poorly administered tax burdens on the performance of small businesses in the North-West geopolitical zone, the study adopts a quantitative, cross-sectional survey research design. Primary data were collected from 310 valid respondents comprising owners, founders, and managers of small businesses across all seven North-West states: Kano, Kaduna, Katsina, Sokoto, Zamfara, Kebbi, and Jigawa. Partial Least Squares Structural Equation Modelling (PLS-SEM) using Smart PLS was employed to analyzed the data. The study reveals that tax rate reform exerts a positive and statistically significant effect on small business performance, tax incentive reform similarly exerts a positive and statistically significant effect, while tax administration reform exerts a negative and statistically significant effect on small business performance. These findings establish tax rate reform and tax incentive reform as twin performance-enhancing tax reform pillars for North-West Nigerian small businesses, while revealing that the current implementation of tax administration reform is actively suppressing small business performance through digital compliance burden, inadequate dispute resolution, and multi-agency coordination failures.