This work was directed at evaluating the effect of overtax strategy on the survival of Small and Medium Enterprises (SMEs) in Cross River State, Nigeria. Explicit objectives were to determine the relationship amongst overtax assessment, collection and utilization and survival of SMEs in the study area. A cross sectional survey design was adopted for the study while the questionnaire was used as an instrument for data collection. A randomly selected 240 employees of selected SMEs were used as respondents for the study. Three hypotheses were tested in line with the objectives of the study. Gathered data were evaluated using the linear regression analysis and one sample t-test. Results showed that significant though negative relationship exists between overtax strategy and the survival of SMEs. Overtax assessment, overtax collection and overtax utilization significantly influence the survival of SMEs in Cross River State, Nigeria although in an unfavorable way. It was recommended among others that the tax system in Cross River State in particular and Nigeria in general, must seek to protect and promote the survival of SMEs for them to contribute meaningfully to economic growth and that they should identify the agents responsible for illegal, overtax collections that seek to frustrate SMEs and prohibit them accordingly.