FREE REGISTRATION SCHEME, TAX INCENTIVE AWARENESS AND PERFORMANCE OF SMEs IN GOMBE STATE

Abstract

Looking at the poor growth rate of SMEs in Gombe state compare to national average, it is obvious that the enterprises are facing some institutional challenges among which include lack of legal status and lack of awareness of other government incentives in tax. In view of these, the study examined the impact of free registration scheme and tax incentive awareness on the performance of SMEs in Gombe state. The study adopted survey cross-sectional research design and collected data using primary method through self-administered questionnaire from 166 SMEs operators in Gombe state. The collected data was analyzed using PLS-Structural Equation Modelling (PLS-SEM). It was found that free registration scheme and tax incentive awareness have significant positive influence on SMEs performance in Gombe state. Based on the findings of the study, it is recommended that government should sustain and expand the free registration scheme by targeting informal enterprises, rural women and youth entrepreneurs who are often excluded due to lack of awareness. It is also recommended that government should strengthen post-registration support because registration alone is not enough if it does not translate to tangible performance improvement. Hence, there is more need for access to finance programs, capacity building mentorship and market linkage initiatives. Lastly, government should intensify the awareness and sensitization campaign about the free registration initiatives and other tax incentives schemes though community leaders and media channels. This will encourage inclusive participation of micro businesses which help in achieving the goal of the initiatives.