Blessing Ivie OSAYANDE

Taxation is a major source of government revenue and a key driver of economic development. In Nigeria, however, tax evasion and avoidance especially among small and medium-sized enterprises (SMEs) continue to hinder effective revenue generation. This study examines how five common SME practices income underreporting, false deductions, non-registration of businesses, multiple business identities, and inappropriate financial records affect economic development. A survey research design was employed, and primary data were collected using structured questionnaires administered to SME operators across different sectors. The data were analyzed using descriptive statistics, chi-square tests, and regression analysis. Cronbach’s Alpha (α = 0.842) confirmed instrument reliability. Findings show that all five practices are prevalent among SMEs. Income underreporting and inappropriate financial records had the strongest negative effects on economic development. Overall, the study concludes that each of the five practices significantly undermines Nigeria’s economic development.