Evaluating the Effectiveness of Tax Exemption Policies on the Growth and Development of Small and Medium-Sized Enterprises (SMEs) in Kaduna State Nigeria

This study investigated the effectiveness of tax exemption policies on the growth and development of small and medium-sized enterprises (SMEs) in Kaduna State, Nigeria, between 2024 and 2026. Using a mixed-methods approach anchored on Keynesian economic theory, the study analyzed quantitative data through simple linear regression and qualitative data descriptively. The study covered a population of 17,141 SMEs, with a sample size of 391 respondents. The findings showed that tax breaks had a significant positive relationship with the employment capacity of SMEs, with R = 0.574 and R² = 0.330, indicating that tax breaks explained 33.0% of the variation in SME employment capacity. Similarly, tax credits had a significant positive effect on the number of SMEs, with R = 0.671 and R² = 0.538, showing that tax credits accounted for 53.8% of the variation in SME numbers. The results suggest that tax exemption measures contributed positively to SME expansion and employment generation, although other economic, institutional, financial and policy factors also influenced SME performance. The study concluded that effective tax exemption policies can support SME growth when properly implemented and complemented by supportive economic and institutional frameworks. It recommended harmonizing tax policies across local, state, and federal government agencies, improving coordination among stakeholders, and simplifying tax administration processes to promote transparency, accountability, and sustainable SME development. Keywords: Fiscal Policy; Keynesian Economic Theory; Macroeconomics; Small and Medium Size Enterprises, SMEs Growth and Development, Taxation