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Presidential Fiscal Policy and Tax Reforms Committee

The FATE Institute’s 2023 report

The FATE Institute’s 2023 report, “Unlocking Prosperity for Nigeria’s NMSMEs through Tax Reforms,” examines the challenges of multiple taxation faced by nano, micro, and small enterprises (NMSMEs). Surveying 10,377 businesses, the report finds that 55% pay taxes, mainly to state agencies, with nano businesses particularly vulnerable to exploitation by non-state actors. Key issues include a lack of tax awareness, distrust in government, and complex procedures. The transportation sector is notably affected. Recommendations include simplifying tax systems, improving stakeholder engagement, incentivizing business formalization, and enhancing tax administration transparency to promote sustainable entrepreneurship and reduce the burden on NMSMEs.

Key Findings from the Report

  1. 55% of nano, micro and small businesses in Nigeria pay taxes.
  2. 33.2% of nano businesses pay taxes/levies to non-state actors.
  3. Registered businesses are more likely to pay taxes than those that are not registered.
  4. Too many taxes and levies; too many collection agents; ad-hoc charges and lack of transparency are some issues businesses cited as key concerns. Some businesses pay as high as 36 taxes to non-state actors, state and local governments.
  5. In some states, government websites related to finance/taxes are not functional; the filing process is manual and tedious.
  6. 60% of entrepreneurs that operate in the transportation and logistics sector identified multiple taxes as an important factor that negatively affected their businesses in the last one year

Download here to read the full report

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