Nigerian SMEs Cautious of Tax Reforms, Prefer Cash Transactions

Despite efforts by the Nigerian government to alleviate tax burdens on small and medium enterprises (SMEs) through the Tax Reform Act of 2025, many SME operators remain skeptical and resort to cash transactions to shield themselves from potential tax liabilities. The reforms aim to ease tax pressures on SMEs by introducing exemptions for companies with annual turnover below N100 million and implementing safeguards against tax harassment.

However, SME owners, like a frozen food retailer in Osogbo, Osun State, still prefer cash payments due to concerns about automatic tax deductions from bank inflows.