The Centre for Enterprise Governance has urged micro, small, and medium enterprises to adopt basic governance structures to remain compliant, competitive, and financially viable amid the implementation of Nigeria’s new tax reforms.

CEG founder Adeyinka Hassan gave the advice on Thursday in Lagos in an interview on the implications of ongoing tax reforms for MSMEs.

He stated that without basic governance structures, MSMEs faced serious risks as the Nigerian business environment became more compliance-driven.

Mr Hassan said that governance was no longer optional for small businesses, noting that Nigeria was moving steadily toward systematic accountability, formalisation, and sustainability based on enforcement.

According to him, CEG’s strategic plan identifies governance as the foundation for enterprise resilience, access to finance, and socioeconomic value creation.

“As tax reforms expand compliance expectations and enforcement capacity, MSMEs without governance structures face existential risks, while those with governance are better positioned to adapt and grow,” he said.

The governance expert identified recurring weaknesses among MSMEs, including informal decision-making, weak financial management, poor record-keeping, absence of internal controls, and limited understanding of tax and regulatory obligations.

He said that these gaps often resulted in incorrect tax filings, disallowed expenses, penalties, interest charges, and disruptive audits.

Mr Hassan said that many MSMEs still viewed governance as an issue meant for large corporations, describing such thinking as risky in today’s operating environment.

According to him, without governance, small businesses lose credibility, access to funding, and partnership opportunities needed for growth.

“Poor governance creates incomplete records, unclear financial trails, and weak controls, which increase exposure to enforcement actions. Scale no longer shields businesses from scrutiny as MSMEs are increasingly integrated into regulated value chains, financial systems, and government programmes,” he said.

Mr Hassan outlined the basic governance structures every MSME should have, including clear roles and authority, basic financial controls, proper documentation, compliance with ownership requirements, and periodic advisory support.

He said that good records and controls enable MSMEs to respond confidently to tax reforms, file accurately, avoid disputes, and demonstrate credibility to regulators and financiers.

The CEG founder said that the new tax reforms also presented opportunities for well-governed MSMEs to improve access to finance, eligibility for government and donor programmes, stronger partnerships, and long-term sustainability.

He added that banks, investors, and public agencies prioritise transparency, accountability, and compliance discipline, adding that CEG’s governance and credit-readiness clinics were designed to help MSMEs meet these expectations.

Mr Hassan advised MSMEs to prioritise formalising records, separating personal and business finances, establishing compliance routines, and seeking structured governance education in the new year.

He said governance could be strengthened without high cost through shared infrastructure, collective training, mentorship, and standardised tools.

The governance expert also cautioned MSMEs against treating compliance as an annual exercise, ignoring documentation until enforcement arises, or operating without advisory support.

“Governance is no longer optional; it is the operating system of sustainable enterprise as governance turns compliance into competitive advantage,” Mr Hassan said.

He also stated CEG’s commitment to supporting MSMEs through governance education, partnerships, and structured membership to strengthen resilience, credibility, and long-term success.

(NAN)