ABSTRACT
This study explores the principles of taxation and their impact on sustainable tax compliance among Micro, Small, and Medium Enterprises (MSMEs) in Nigeria. The primary objectives are to ascertain the relationship between the principles of tax certainty, tax economy, tax fairness and sustainable tax compliance among Micro, Small and Medium Enterprises (MSMEs) in Nigeria. Historically, taxation has been a fundamental aspect of economic management, with roots tracing back to ancient civilizations. Despite the evolution of tax principles over centuries, including contributions from Adam Smith and the American Institute of Certified Public Accountants (AICPA), tax compliance remains a significant issue, particularly for MSMEs in developing economies like Nigeria.
In Nigeria, MSMEs play a crucial role in economic development by fostering local employment, utilizing local resources, and promoting technological advancement. However, these enterprises often struggle with complex tax regulations and high compliance costs, leading to non-compliance and tax evasion. This study employed a quantitative research approach, multiple regression analysis to interpret data collected through surveys distributed among MSMEs. The results highlight the high compliance costs and lack of expertise as major barriers to tax compliance.
The findings suggest that simplifying tax regulations and reducing compliance costs can significantly enhance tax compliance among MSMEs. The study concludes with recommendations for policy reforms to create a more favorable tax environment for MSMEs, thereby boosting government revenue and supporting the sustainable development of the Nigerian economy.
