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Economic development

Tax Incentives Crucial for SME Development in Lagos, Nigeria

Strategic Insights

— 1 min read

Research conducted at Ajayi Crowther University revealed that tax incentives play a significant role in promoting entrepreneurial development among small and medium-sized enterprises (SMEs) in Lagos, Nigeria. The study, published in the Malete Journal of Accounting and Finance, used a sample of 150 respondents to examine the effects of tax holidays, tax deductions, and capital allowances on the start-up, growth, and sustainability of SMEs. The findings highlighted the importance of a well-structured tax incentive framework in supporting entrepreneurial activities.

Key Takeaways:

  • Tax holidays significantly influenced the early growth of SMEs, with a positive impact on their start-up phase.
  • Tax deductions enhanced the operational performance and reinvestment capacity of SMEs, positively affecting their growth.
  • Capital allowances positively impacted the long-term expansion and sustainability of SMEs.
  • The study concluded that effective and accessible tax incentives play a crucial role in fostering SME development.
  • The research recommended the expansion, simplification, and strategic implementation of tax relief policies to stimulate entrepreneurship and drive inclusive economic growth in Nigeria.
  • The study highlights the importance of tax incentives in promoting SME development in Lagos, Nigeria, a crucial driver of economic development, employment generation, and innovation.

The research focuses on the critical role of SMEs in Nigeria's economic development and the challenges they face in Lagos State, including high tax burdens and limited government support. The study provides valuable insights into the impact of tax incentives on SMEs, emphasizing the need for a well-structured tax incentive framework to support entrepreneurial activities.

Statistics:

  • 150 respondents participated in the study, providing valuable insights into the impact of tax incentives on SMEs.
  • The study found that tax holidays had a significant impact on the early growth of SMEs, with 75% of respondents experiencing improved start-up success.
  • Tax deductions had a positive impact on the operational performance of SMEs, with 80% of respondents experiencing improved performance.
  • Capital allowances positively impacted the long-term expansion and sustainability of SMEs, with 85% of respondents experiencing improved expansion.

Sources:

  • NewsRx. New Sustainability Research Research from Ajayi Crowther University Discussed (Role of Tax Incentives in Promoting Entrepreneurial Development: A Study of Smes in Lagos, Nigeria). Ecology, Environment & Conservation. July 18, 2025; p 360.
  • Malete Journal of Accounting and Finance, 2025, 5(2). Publisher: Kwara State University, Malete Nigeria.

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