Nigeria’s drive to establish a sustainable and transparent tax ecosystem faces significant hurdles as a large proportion of Small and Medium Enterprises (SMEs) continue to operate without proper documentation, industry experts have warned.
Dr. Haruna Nma Yahaya, President of the Institute of Chartered Accountants of Nigeria (ICAN), raised the concern during the 2025 Professional Services Group & Advocacy Tax Symposium organized by the Chartered Institute of Directors (CIoD) last week.
Yahaya emphasized that SMEs, which form the backbone of Nigeria’s private sector, often operate with weak record-keeping systems, inadequate financial documentation, and limited compliance frameworks. He noted that the effectiveness of ongoing tax reforms depends heavily on the ability of SMEs to strengthen internal controls and embrace transparency, accountability, and accurate reporting.
“Capacity building must also target SMEs, which constitute the bulk of Nigeria’s private sector. Directors who lead these enterprises must champion record-keeping, financial literacy, and a culture of compliance. Nigeria cannot build a sustainable tax ecosystem if the backbone of the economy remains undocumented,” Yahaya said.
He further explained that with Nigeria’s tax administration moving increasingly toward digital platforms, SMEs that fail to maintain accurate financial records risk penalties, operational disruptions, and missed opportunities for growth. In a digital tax environment, poor data quality has shifted from being a minor inconvenience to a major business risk.
Yahaya’s comments underscore the urgent need for SMEs to modernize financial systems and adopt rigorous compliance practices if Nigeria’s broader tax reform agenda is to succeed.
