Background of the Study
The informal sector plays a critical role in Nigeria's economy, accounting for a substantial portion of employment and economic activity. However, taxing this sector remains a significant challenge due to its unstructured nature, limited record-keeping, and resistance to formalization (Eze & Ahmed, 2024). Kano's Sabon Gari Market, one of the largest and most vibrant informal markets in Nigeria, exemplifies the complexities of taxing informal businesses.
Efforts to tax informal businesses often encounter challenges such as distrust of tax authorities, lack of awareness, and perceived inefficiency in the use of tax revenues. These issues undermine compliance and hinder the government's ability to generate revenue from a critical segment of the economy (Olowookere & Adebayo, 2023). This study examines the specific challenges of taxing informal businesses in Kano's Sabon Gari Market, exploring potential solutions to improve compliance and revenue collection.
Statement of the Problem
Despite its economic significance, the informal sector contributes minimally to government revenue in Nigeria. Taxing informal businesses in Sabon Gari Market is particularly difficult due to the absence of formal structures, inadequate taxpayer education, and a lack of trust in the tax system. These challenges limit the effectiveness of existing tax policies and perpetuate non-compliance (Mustapha & Yakubu, 2024).
This study seeks to identify and analyze the challenges of taxing informal businesses in Sabon Gari Market, offering recommendations for addressing these issues to enhance compliance and revenue collection.
Objectives of the Study
Research Questions
Research Hypotheses
Scope and Limitations of the Study
The study focuses on informal businesses in Kano's Sabon Gari Market from 2023 to 2025. Limitations include difficulties in obtaining reliable data from informal business owners and potential resistance to participation in the study.
Definitions of Terms
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