An Analysis of the Impact of Tax Increase on the Performance of Cattle Business in Mubi Cattle Market, Adamawa State

Abstract

While cattle business is crucial in propelling economic growth through job creation, income generation and poverty eradication in Nigeria, it is also a significant source of government revenue through tax. Adamawa State government recently increased tax on cattle traded in Mubi International cattle market in order to generate more revenue for development. However, this policy had generated serious controversies among the cattle business owners in the market. In consideration of these developments, this study examined the impact of the tax increase on the performance of cattle business in Mubi cattle market. Data were collected on 400 randomly selected cattle business owners in the market to gain insights into their perceptions of the impact of the recent government tax policy. Using a purely descriptive method, the study’s findings revealed that the tax increase resulted in substantial upsurge in the overall operating costs with nearly 90% of respondents reporting either a significant or moderate rise in costs. The result further showed that 63.2% of respondents reported a decrease in profit margins, with 25.5% indicating a significant decrease and 37.7% reporting a moderate decrease. The findings also suggested that a significant proportion (74.25%) of cattle business owners have considered relocating or have already stopped patronizing Mubi Cattle Market due to the tax increase. Among those who have relocated or stopped patronizing the market, the majority (64.56%) consisted of business owners who had 1-10 cattle. Furthermore, the result revealed a substantial decline in cattle inflows from the neighbouring countries thereby affecting the volume of cross-border cattle trade. In line with these findings, this study recommends among others that policymakers should consider implementing targeted tax relief measures or incentives to alleviate the financial burden on cattle busine

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