IMPACT OF TAXATION ON BUSINESS PERFORMANCE IN ONDO WEST LOCAL GOVERNMENT AREA OF ONDO STATE

ABSTRACT This study investigate the impact of taxation on business performance in Ondo West Local Government Area of Ondo State. Using a descriptive survey research design the study sought to understand how tax policy changes affect business operations, workforce management, and strategic decision-making. Data was collected through a questionnaire administered to 100 respondents, with analysis conducted using frequency counts and mean calculations. The findings revealed that alterations in tax policies significantly influence business operations. For instance, favorable tax policies led to increased hiring, adjustments in employment contracts. and more frequent workforce training and development, highlighting how businesses adapt their strategies to align with tax expectations. These findings were consistent with existing research, such as Egharevha (2021), which emphasizes the responsiveness of businesses to tas law changes Additionally, the study found that high tax obligations have a notable impact on business strategies, compelling businesses to adopt cost-cutting measures to maintain profitability. Businesses also adjusted their financial practices employing tax-efficient strategies to mitigate the financial burden of high taxes. However, the study noted that businesses did not vignificantly alter their pricing strategies in response to tax changes, suggesting that internal adjustments took precedence over changes in consumer-facing practices. This finding aligns with the work of Adesanya (2022), which suggests that businesses focus more on internal restructuring rather than altering pricing models when faced with increased tax obligations. In conclusion, the study underscores the significant role of taxation in shaping business performance in Ondo West Local Government Area. The findings suggest that tax policy changes, such as increases in corporate tax rates and VAT. influence businesses' financial performance, operational strategies, and long-term growth plans. While tax reductions foster business growth, high taxes pose challenges, leading businesses to adopt cost-saving strategies and reconsider expansion plans. Based on these findings, the study recommends tax reforms aimed at reducing the financial burden on businesses, particularly SMEs, and proposes incentives for innovation and sustainable practices. Further, it advocates for improved training and technical support to help businesses navigate complex tax regulations.