ABSTRACT

The importance of Small and Medium Scale Enterprises (SMEs) in Lagos state in recent years cannot be underrated especially with regard to creation of employment, innovation, uplifting the people‟s standard of living and financial contribution to the growth of the countries‟ Gross Domestic Product. This sector's growth is hindered by the challenges of lack of financial resources to expand, the entrepreneur managerial skills/attitudes, employment of cheap and unskilled labor , production of poor quality goods, lack of market for their products, inadequate infrastructural facilities and above all unpleasant taxation policy of Lagos state government. In the light of all these, this study reviews the role being played by various governmental tax reliefs on the growth of SMEs in Lagos state. The study employed descriptive design, thus, primary data was collected on variables contributing to tax influence and their effect on the growth of SMEs. A sample of 50 respondents representing a percentage of targeted population enterprises in the production sector of Lagos State Industrial area was selected through Stratified and Simple Random Sampling techniques. Data collected through questionnaires, interviews and observations when necessary was analyzed using regression model to estimate the contribution of each variable to effect of tax reliefs on SMEs used over the years by the Lagos state government. The study found that there was a significant correlation between tax reliefs on SMEs growth in Lagos State. The study recommends that there should be a friendly tax policy for all startup businesses preferably a tax reliefs, or an introduction of a growth limit which can be said to be a level stable enough to sustain tax payment.