Determinants of effective tax collection from the informal sector in Kano State Nigeria: the moderating influence of awareness

• Main Author: Wambai, Usman Sani Kofar
• Format: Thesis
• Language: English; English; English
• Published: 2020
• Subjects: HJ4771.6 Income Tax. Tax Returns.
• Online Access: https://etd.uum.edu.my/9486/1/depositpermission_s95388.pdf; https://etd.uum.edu.my/9486/2/s95388_01.pdf; https://etd.uum.edu.my/9486/3/s95388_references.docx; https://etd.uum.edu.my/9486/

Globally, nations are progressively moving away from being resource-based to becoming tax-based, perhaps because taxation is recognized world-wide as the most reliable revenue source. Despite the enactment and enforcement of the Kano State taxes and levies law in 2016 and the revenue administration law in 2017 respectively, tax collection remains consistently low and ineffective in the State. Informal sector is identified to be one of the contributing sectors to this scenario. The magnitude of the informal sector in the State is found to be large and consequently, this study investigates the determinants of effective tax collection from the sector in Kano State, Nigeria within the social exchange theory and integrated awareness as a moderator to explain the relationship between these determinants. Primary data were sourced from 384 tax collectors through administration of questionnaires to answer questions on issues relating to tax collection. Hence, multiple and hierarchical regressions were applied through Statistical Package for Social Sciences (SPSS) to test the hypotheses formulated. The study discloses the significance of the variables investigated, specifically, public governance quality, tax incentives, ease of paying tax, income, penalty and awareness as influential determinants of effective tax collection from the sector. More so, it shows the consequence of effective informal sector taxation as a technique for revenue generation to facilitate government’s effort in providing infrastructural development in the state. The study concludes that policy formulators and tax authorities should pay more attention to these determinants for improved tax collection from the informal sector. The study contributes to literature on social exchange theory which explains the relationship between the variables investigated and effective tax collection from the informal sector.