SMALL AND MEDIUM SCALE ENTERPRISES (SMES) IN NIGERIA AND THE REGIME CHANGE IN TAX

Abstract

Fiscal reforms and the objective of promoting ease of doing business are among the key policy priorities of the Tinubu-led administration in Nigeria. Since assuming office in May 2023, the administration has introduced significant changes in economic policies, generating growing debate regarding their benefits and broader implications. One major area of reform is Nigeria’s tax system. Although previous administrations had initiated reforms aimed at encouraging economic growth and incentivising small businesses, the current regime has undertaken a more extensive restructuring of the tax framework. The new tax regime is primarily focused on curbing tax leakages, unifying revenue collection agencies, and harmonising taxes to reduce the problem of multiple taxation within the Nigerian economy.

Notably, recent reforms have resulted in the enactment of the Nigeria Tax Act, 2025 (NTA), the Nigeria Tax Administration Act, 2025 (NTAA), the Nigeria Revenue Service (Establishment) Act, 2025 (NRSA), and the Joint Revenue Board of Nigeria (Establishment) Act, 2025 (JRBA). Given the substantial alterations introduced under this framework, it has become necessary to examine the effects of these reforms and novel provisions on both individual taxpayers and businesses, particularly small and medium-sized enterprises (SMEs). Accordingly, this article examines the impact of Nigeria’s new tax regime, especially the NTA 2025 and the NTAA 2025, on SMEs in Nigeria. It also evaluates previous tax practices, highlights the milestones achieved through recent reforms, and considers the prospects and challenges for the future.