In Nigeria, taxation plays important role in the development of every economy as well as the growth of Small and Medium Enterprises (SMEs). Also, the role of SMEs is critical in pushing the socio-economic development agenda of the country further. Therefore, alignment of the tax system to the specific SME growth needs can be considered an important agenda for the policy makers. Keeping this issue at focus, this study aimed to explore the top management's perception of the tax system on the profitability of their businesses. The study is based on a survey of ten (10) selected SMEs in the South Local Government Area of Akure, Ondo state. The survey was administered using questionnaires with the selected respondents. Data was analyzed by descriptive analysis method, correlation and regression analysis and findings were presented in terms of frequencies and percentage analysis. The findings of this study indicate that majority of the respondents perceive and agree with the less effective impact of existing tax policies as regards profitability, productivity, ease of tax administration and tax utilization, on the performance of SMEs and suggest for constructive review and reforming of the tax policies in the country at large.