From Cash to Code: Making Tax Payment Easier for Small Businesses

Before: A study by SDN on multiple taxation in Rivers State, surveying 1,200 business owners, highlights a pressing issue: multiple taxation is still a heavy burden, particularly for women and young entrepreneurs. Despite the Rivers State Government’s 2023 announcement to eliminate multiple taxation, businesses still grapple with a myriad of taxes, levies, and fees imposed by various levels of government and other entities. The study uncovered 75 official charges across federal, state, and local governments, many of which are redundant or overlapping, along with additional community and security-related payments.

 The problem is worsened by the heavy reliance on cash transactions: a staggering 93% of businesses surveyed paid taxes in cash, while only 8% used the state’s digital tax portal. This situation complicates record-keeping and increases the risk of duplicate charges, unauthorised collections, intimidation, and payment disputes. For small businesses operating on slender margins, this cumulative burden makes compliance increasingly difficult and fosters an unpredictable business environment. 

After: Working through the State Tax Justice and Governance Platform alongside Community Conciliation and Development Initiative (CCADI), SDN’s research and advocacy contributed to the Rivers State Internal Revenue Service’s launch of a USSD-code tax payment platform, developed in partnership with LSSBI Advisory. The platform provides a lower-barrier digital payment option for small and informal businesses, helping address one of the practical barriers identified through SDN’s research: limited access to accessible, traceable and convenient methods of tax payment.

The reform represents a shift from a predominantly cash-based system towards more accessible and accountable tax administration, giving businesses a simpler way to make payments and retain evidence of transactions. It also shows how research evidence can inform policy and institutional engagement to address practical barriers businesses face.

Source: SDN donor reporting on the DASI project and SDN’s “Multiple Taxation in Rivers State” report.