ABSTRACT
This study ascertained the determinants of taxpayers’ non-compliance in the informal sector. The specific objectives of the study were to investigate the impact of resource constraint, illiteracy, lack of information, multiplicity of taxes, and low tax morale on taxpayers’ non-compliance in the informal sector in Ebonyi South Senatorial District in Nigeria.
This study employed the use of a well-structured questionnaire in eliciting responses from the sampled respondents, in the four (4) Local Government that made up of the Senatorial District which includes Ivo, Ohaozara, Afikpo North and Afikpo South. The 5-point Likert scale was used in developing the questionnaire.
From the descriptive analysis of results, Resource Constraint (RCON) was found to have a negative impact that was not significant on taxpayers’ non-compliance in the informal sector. Illiteracy (ILL), Lack of Information (LOI), and Low Tax Morale (LTM) were found to have positive and significant impact on taxpayers’ non-compliance in the informal sector in Nigeria. However, Multiplicity of Taxes (MOT) was found to have a positive but not on a high significant impact on taxpayers’ non-compliance.
This study concluded that Illiteracy, Lack of information, and Low tax morale are strong determinants of taxpayers’ non-compliance in the informal sector in state; while, Resource constraints and Multiplicity of taxes are not significant determinants of taxpayers’ non-compliance in the informal sector in Nigeria. Therefore, was recommended that the government should make available sufficient human, financial and material resources for efficient tax administration; there should be continuous sensitization and awareness of taxpayers on the need to pay taxes; the government should encourage taxpayers to keep adequate financial records of their businesses; lastly, the government should ensure that taxpayers’ money is judiciously utilized
