STATUTORY TAX RATE ADJUSTMENTS AND FINANCIAL PERFORMANCE OF SMALL AND MEDIUM SCALES ENTERPRISES IN SOUTH-WEST, NIGERIA

This study examined the effect of statutory tax rate adjustments through tax reforms on the financial performance of SMEs in Southwest Nigeria. The study was motivated by the increasing weight of tax obligations on SMEs alongside recent legislative reforms, including the Nigeria Tax Act 2025, whose practical effect on SMEs at the sub-national level remains under-researched. A quantitative, cross-sectional survey design was adopted, and structured questionnaires were administered to SMEs owners, managers, and accountants of registered SMEs operating in the West of Nigeria. Data were analyzed using descriptive statistics and simple linear regression at a 5% level of significance. The results showed that changes in the statutory tax rate changes had no statistically significant effect on SME profitability (R² = 0.003, p = 0.584). But low awareness of tax policy reforms among respondents was found to be borderline, and measurement reliability for the study scales was weak, a limitation that qualifies the strength of the substantive conclusions. The study concludes that perceived tax relief did not translate into a measurable improvement in financial profitability, suggesting that reform design, awareness, and implementation gaps may limit the intended benefits of tax policy reform for SMEs in Nigeria. The study recommends the improvement of awareness campaigns and harmonization of multiple taxes across government levels in the south-west Nigeria