Taxation and Environmental Sustainability: Evaluating the Potential for Green Tax Policies Targeting MSMEs in Adamawa State

Abstract

This study examines the role of green tax policies in promoting environmental sustainability among Micro, Small, and Medium Enterprises (MSMEs) in Adamawa State, Nigeria, within the framework of Nigeria’s 2025 tax reforms. Using a mixed-methods approach, the research analyses how green tax instruments influence environmental compliance and sustainable business practices. The findings indicate that green tax incentives effectively encourage eco-friendly production and resource efficiency among MSMEs, but their impact is limited by low awareness, financial constraints, and weak enforcement. The study highlights the importance of complementary policy measures, including targeted tax reliefs, capacity building, and improved regulatory clarity, and contributes empirical evidence to debates on environmental fiscal reforms in sub-Saharan Africa.