The Effect of Multiple Taxation on the Survival of Small Businesses in Abakaliki Metropolis

Multiple taxation by overlapping tiers of government constitutes a pervasive challenge for small businesses in Nigerian urban areas, undermining profitability, stifling enterprise growth, and in extreme cases precipitating business closure. This study investigates the effect of multiple taxation on the survival of small businesses in Abakaliki metropolis, Ebonyi State, with data drawn from the period 2021 to 2024. The study is anchored on the Optimal Taxation Theory, which holds that a tax system inflicts minimum economic distortion when it generates required revenue through a streamlined, transparent, and equitable levy structure. A cross-sectional survey research design was adopted, targeting small businesses registered in Abakaliki. From an estimated population of 7,200 small business owners, a sample of 365 respondents was selected using stratified random sampling. Structured questionnaires were the primary instrument, supplemented by tax receipt analysis. Findings indicate that the average small business in Abakaliki paid levies to an average of five different government agents monthly, totaling between 15,000 and 40,000 naira depending on business size. Over 48 percent of respondents reported considering business closure primarily due to the cumulative burden of uncoordinated taxation. The study concludes that multiple taxation is a material threat to small business survival in Abakaliki. It is recommended that Ebonyi State harmonize its tax collection into a single window system and eliminate all unauthorized levies charged outside the formal tax schedule.

Keywords: Multiple taxation, small business survival, Abakaliki, tax burden, optimal taxation