An assessment of taxation and its implications on small and medium enterprises in Aba North Local Government Area, Abia State
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Background of the study
Taxation is a critical policy instrument that significantly influences the operational landscape of small and medium enterprises (SMEs). In Aba North Local Government Area, Abia State, taxation policies have become a contentious issue among business owners, with many arguing that high tax rates and complex regulations stifle entrepreneurial growth and innovation. Over the past decade, debates have emerged regarding the balance between generating government revenue and supporting a vibrant SME sector (Okoro, 2023). SMEs are often perceived as the backbone of the local economy, yet they face numerous challenges in meeting tax obligations while sustaining business operations. Studies have shown that excessive taxation can lead to reduced investment, lower competitiveness, and even business closures (Eze, 2024). Conversely, a well-structured tax system can encourage compliance and drive economic development by facilitating infrastructure development and public service delivery (Chukwu, 2025). This study seeks to explore the implications of current taxation policies on SMEs in Aba North, examining both the financial burden and the administrative challenges imposed on business owners. By employing surveys and interviews, the research aims to quantify the impact of taxation on SME growth and propose policy recommendations for creating a more conducive environment for small business development.
Statement of the problem
SMEs in Aba North Local Government Area face significant challenges arising from taxation policies that many perceive as overly burdensome. High tax rates, coupled with complex compliance procedures, have been cited as key factors hindering business growth and sustainability (Obi, 2023). The financial strain caused by taxation often forces SMEs to divert limited resources away from business expansion and innovation, thereby undermining their competitive edge. Additionally, there is a lack of clarity and consistency in tax administration, which further exacerbates the difficulties faced by business owners. This study aims to address these issues by investigating the specific impacts of taxation on SMEs and exploring potential reforms that could alleviate the fiscal pressures on small businesses (Afolabi, 2024).
Objectives of the study:
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To assess the impact of taxation on the operational performance of SMEs in Aba North.
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To identify the major challenges SMEs face in tax compliance.
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To propose policy reforms aimed at reducing the tax burden on SMEs.
Research questions:
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How does taxation affect the growth of SMEs in Aba North?
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What are the major challenges in tax compliance for SMEs?
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What policy reforms can mitigate the negative impacts of taxation on SMEs?
Research Hypotheses:
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High taxation negatively impacts SME growth.
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Complex tax regulations hinder SME competitiveness.
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Policy reforms can significantly reduce the fiscal burden on SMEs.
Significance of the study
This study is significant as it offers an in-depth analysis of how taxation affects SMEs in Aba North. Its findings will provide valuable insights for policymakers and business leaders on reforming tax policies to support small business growth. The research contributes to academic discussions on fiscal policy and economic development while offering practical recommendations to ease the tax burden on SMEs, thereby fostering a more dynamic local economy (Ibrahim, 2023).
Scope and limitations of the study:
The study is limited to assessing the implications of taxation on small and medium enterprises within Aba North Local Government Area, Abia State, and does not extend to other regions.
Definitions of terms:
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Taxation: The process of levying taxes by the government.
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Small and medium enterprises (SMEs): Businesses with limited capital and workforce.
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Compliance: Adherence to tax laws and regulations.
An appraisal of social capital and entrepreneurial success in Ikorodu Local Government Area, Lagos State
Background of the study
Social capital, defined as the networks, norms, and trust that facilitate coordination and cooperation among individuals, plays a crucial role in entrepreneurial success. In Ikorodu Local Government Area, Lagos State, social capital has emerged as a significant factor that influences the performance of entrepreneurs. Strong social networks provide entrepreneurs with access to essential resources such as information, capital, and market opportunities (Adewale, 2023). Empirical studies suggest that entrepreneurs embedded within supportive communities tend to exhibit higher levels of innovation and business resilience (Olatunji, 2024). In Ikorodu, the interplay of cultural, social, and economic factors creates a unique environment where interpersonal relationships and community engagement are critical for business growth. This study examines how social capital affects entrepreneurial outcomes by analyzing the quality and extent of social networks among business owners. Drawing on both qualitative interviews and quantitative surveys, the research explores the mechanisms through which trust and reciprocity contribute to business success (Balogun, 2025). The findings are expected to underscore the importance of fostering social networks as a strategy for enhancing entrepreneurial performance and overall economic development in the area.
Statement of the problem
Despite its recognized importance, the role of social capital in facilitating entrepreneurial success in Ikorodu remains underexplored. Many entrepreneurs in the area report challenges in accessing reliable networks that provide critical support in terms of information and resources. The absence of robust social capital can result in missed opportunities, reduced innovation, and lower business performance (Ibrahim, 2023). Additionally, the fragmented nature of social networks in Ikorodu often leads to a lack of trust and reciprocity among potential business partners. This study aims to address these gaps by investigating the relationship between social capital and entrepreneurial success, and by identifying barriers to effective network formation (Ogunyemi, 2024).
Objectives of the study:
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To assess the influence of social capital on entrepreneurial success in Ikorodu.
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To identify the key components of social networks that contribute to business growth.
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To propose strategies to enhance social capital among entrepreneurs.
Research questions:
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How does social capital influence entrepreneurial performance in Ikorodu?
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What are the key elements of social networks that support entrepreneurial success?
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How can entrepreneurs build stronger social capital?
Research Hypotheses:
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Higher social capital is associated with improved entrepreneurial performance.
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Trust and reciprocity within networks significantly impact business success.
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Strategies to enhance social capital lead to better entrepreneurial outcomes.
Significance of the study
This study is significant as it provides insights into the role of social capital in driving entrepreneurial success in Ikorodu. The research will guide policymakers and business support organizations in designing initiatives that strengthen community networks, ultimately fostering a more robust entrepreneurial ecosystem. The findings contribute to academic discussions on social capital and entrepreneurship, offering practical recommendations for enhancing business performance (Ogunleye, 2023).
Scope and limitations of the study:
The study is limited to evaluating the influence of social capital on entrepreneurial success within Ikorodu Local Government Area, Lagos State, and does not consider other urban centers.
Definitions of terms:
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Social capital: The networks and relationships that facilitate collective action.
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Entrepreneurial success: The achievement of business growth and sustainability.
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Networking: The process of establishing and nurturing relationships that provide mutual benefits.
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