Awareness and Perceptions of Small And Medium Enterprises on Nigeria’s 2025 Tax Reform Law

Abstract

This study investigated the awareness and perceptions of Small and Medium Enterprises (SMEs) regarding Nigeria’s 2025 Tax Reform Law. The study was guided by two objectives, two research questions, and corresponding research hypotheses. A descriptive survey research design was adopted, focusing on registered SMEs operating across the five states of the South-East geopolitical zone of Nigeria. A stratified random sampling technique was employed to ensure adequate representation based on state, business location (urban and rural), and gender ownership. A total sample size of 200 SMEs was targeted, comprising 120 male-owned (60%) and 80 female-owned (40%) enterprises. Data were collected using a structured questionnaire titled Awareness and Perceptions of Small and Medium Enterprises on Nigeria’s 2025 Tax Reform Law Questionnaire (APSMENTRLQ). The instrument consisted of three sections covering demographic information, awareness of the tax reform law, and perceptions of the law. A five-point Likert scale was used for the awareness and perception sections. Face and content validity were established by experts in taxation and accounting, while reliability was determined through a pilot study involving 20 SMEs from the South–South geopolitical zone of Nigeria. Cronbach’s Alpha coefficients of 0.82 and 0.91 were obtained for the awareness and perception sections, respectively, indicating high internal consistency. Out of the 200 questionnaires administered through face-to-face and online methods, 192 were correctly completed and returned, yielding a response rate of 96.0%. Data were analyzed using descriptive statistics (mean and standard deviation) and inferential statistics (independent samples t-test). The findings revealed that SMEs possessed a moderate level of awareness of Nigeria’s 2025 Tax Reform Law. While respondents showed fair knowledge of the law’s existence and general provisions, awareness was low regarding penalties for non-compliance and tax dispute resolution procedures. SMEs’ perceptions of the reform were neutral to moderately positive, acknowledging its potential benefits while expressing concerns about increased operating costs and inadequate government communication. Inferential results indicated significant differences in awareness between urban and rural SMEs, as well as significant differences in perceptions between male-owned and female-owned enterprises. The study recommends targeted, inclusive, and sustained tax sensitization strategies to enhance effective compliance with the reform. Received: 11 January 2026 / Accepted: 26 February 2026 / Published: March 2026