Taxpayers' Awareness, Taxpayers' Perception, and Tax Compliance in the Informal Sector Within the Oyo North Senatorial District of Nigeria

Folayan Oluwadare David; Bello Adewale Olufisayo

doi:doi:10.11648/j.sjbm.20251303.12

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Taxpayers' Awareness, Taxpayers' Perception, and Tax Compliance in the Informal Sector Within the Oyo North Senatorial District of Nigeria

Folayan Oluwadare David^*

, Bello Adewale Olufisayo

Published in Science Journal of Business and Management (Volume 13, Issue 3)

Received: 6 June 2025 Accepted: 25 June 2025 Published: 30 July 2025

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Abstract

This research paper examined the relationship between taxpayers' awareness, taxpayers' perception, and tax compliance in the informal sector within the Oyo North Senatorial District of Nigeria. The informal sector plays a significant role in the Nigerian economy but often faces challenges related to tax compliance. The study aimed to provide empirical evidence on how taxpayers' awareness and perception influence their compliance behavior in this sector. Through a comprehensive survey conducted among informal sector taxpayers in Oyo North Senatorial District, valuable insights were gathered regarding their awareness of tax obligations, perceptions of the tax system, and their compliance behaviors. The findings indicate that taxpayers' awareness of tax obligations has positive and significant influences their compliance with tax laws with β = 0.144 at PV> 0.05. The study also revealed that taxpayers' perceptions of the fairness and effectiveness of the tax system has positive and significant influence on tax compliance behavior β = 0.588 at PV> 0.05. Overall, the research underscores the need for targeted interventions aimed at enhancing taxpayers' awareness and fostering a positive perception of the tax system to promote higher levels of compliance in the informal sector of Oyo North Senatorial District, Nigeria. This study contributes to the existing literature on tax compliance behavior in developing countries and provides practical implications for policymakers, tax authorities, and other stakeholders involved in tax administration and enforcement efforts.

Published in	Science Journal of Business and Management (Volume 13, Issue 3)
DOI	10.11648/j.sjbm.20251303.12
Page(s)	187-195
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2025. Published by Science Publishing Group

Keywords

Tax Payers' Awareness, Taxpayers' Perception, Tax Compliance

1. Introduction

Nigeria's overdependence on mono-economy created a drawback to economic growth and development. Fluctuation in the global oil, national wide insurgencies, banditry, militancy and kidnapping are various delirious activities rocking the political atmosphere in Nigeria constituted to low revenue generation through oil proceeds

[10]

The drop in oil revenue generation serve as eye-opener to diversify the economy to alternative sources of revenue which includes tax revenue. Tax is a fiscal policy instrument used by government to stimulate economic growth

[10]

. Economic growth and development is contingent on the revenue generation and its availability is necessary to meet both government capital and recurrent expenditures of government

[1, 2]

. Taxes are mandatory charges on taxable income of individuals, sole proprietorships, partnership and corporate entities

[14]

. Formal sector have witnessed strictly tax law enforcement, awareness and investigation which constitute high level of tax compliance within the sectors. Income taxes such as Pay As You Earn and Corporate taxes contribute to more than 60% of the tax revenue in Nigeria. Akinyiga however views that tax revenue to gross domestic product is about 6% in 2020 which considerably very low compare to 26% in South Africa

[4]

. Informal Sector is not easily defined. There is no consensus among the existing literatures as regard definitions and scope of informal economy

[11]

. Small and Medium Enterprises dominate informal Sector of the economy, despite there is low tax compliance within the sectors. Salawu et al opine that about 6,131 SMEs were registered in Oyo State, despite there is low tax revenue generation

[14]

. Oyegun and Efangwu opine that geometric progression in Nigerian population does not match the tax revenue generation since majority of the population falls within the informal Sector of the economy

[13]

. One of the challenges of the tax administration in the sector, is how to draw potential tax payers to the tax net

[13, 11]

. Tax compliance is the payment of appropriate income taxes within the provisions of tax laws. Non tax compliance within the informal sector is characterized with poor tax awareness and education, wrong perceptions of tax payers to tax payment and negative attitudes toward tax payment. Okeke et al view the sector as unobserved and unprotected sectors due to the peculiarities. Many have poor education about taxes while some have wrong attitude toward tax payment

[12]

. Moore opines that tax administrations waste a lot of resources within informal sector in sub Saharan Africa as the sector is under taxed

[7]

1.1. Objective of the Study

The study investigates the impact of taxpayers' awareness and tax payers' perceptions on tax compliance of Informal sector within Oyo North Senatorial District, Nigeria. The following specific objectives are investigated:

i) The impact of taxpayers' awareness and education on tax compliance of Informal sector in Oyo North Senatorial District.

ii) The impact of taxpayers' perceptions on tax compliance of Informal sector in Oyo North Senatorial District.

1.2. Hypotheses

Ho1: Taxpayers’ awareness and education have no significant impact on tax compliance of informal sector in Oyo North Senatorial District.

Ho2: Taxpayers’ perceptions have no significant impact on tax compliance of informal sector in Oyo North Senatorial District.

2. Literature Review

2.1. Concept of Informal Sector

Informal sector is the proportion of an economy which is not adequately regulated by a specific law in the nation. This aspect of the economy is strictly moderated by various trade associations which may or may not be registered with appropriate authority. Moore views informal sectors as unproductive taxpayers' sector

[7]

. The view is supported by the study that majority of the operators in the sectors avoid payment of taxes. Okeke et al, view informal sector as an unobserved, unorganized or unprotected economy

[12]

. Informal sector is often exposed to lot of challenges which may lead to insecurity within the sector. Attention of relevant tax authority is shifted from this sector as outfits, edifices and revenue size are often and reasonably low. Informal sector consists of economic activities involving production and distribution of goods and services which are not registered and regulated

[14]

. Wahua et al, view informal sector as an underground economies or traditional sectors or shadow economies as operators in them lack primary documentation to bring them into tax net

[17]

. Many of Small and Medium Enterprises fall within the informal sectors

[14]

. Mpofu opines that large and expanding informal sectors place a limitation on revenue collection in developing nations

[8]

. Contributions to the tax revenue are minimal or negligible. Unavailability of data hinders relevant tax authority to assess the operators to tax. Underground economies are not registered and regulated in entirety and this make imposition of taxes impossible

[9]

. Tax revenue maximization objective calls for more informal sectors to be brought into tax net.

2.2. Taxpayers' Awareness and Education

Taxpayers’ awareness and education is paramount to achieve tax compliance. Tax awareness is alertness of the taxpayer toward prompt payment of tax due. Ogungbade et al, describe tax awareness as consciousness, alertness and knowledge of the tax payers of their civil responsibilities to tax payment

[10]

. Informal sector operators are not adequately informed about taxes they are to pay and the relevant tax authorities

[14]

. Many informal sector operators fall within the low income and little knowledge of business registrations

[9]

. Tax payers' awareness and education have been affirmed by the existing to positively influence tax compliance

[9, 10, 14, 15].

2.3. Taxpayers' Perceptions

Taxpayer's perception is described as the view of taxpayer toward government expenditures. Government’s failure to discharge some civil responsibilities serves as negative signal to would be taxpayers. Ogungbade et al, (2023) describe tax payers' perceptions as how taxpayers view government's ways of spending tax revenue. Tax morale can only be boosted if taxpayers perceive corresponding positive economic effect of taxes. Positive perception of taxpayers has positive significant influence on tax compliance

[11].

2.4. Tax Compliance

Informal sector is characterized with non tax compliance. Ogungbade et al, attribute non tax compliance of the informal sector operators due low income level and little or no information on taxes to be paid

[10]

. Salawu et al, opine that non tax compliance among the Small and Medium Enterprises are functions of tax compliance costs and corruption of tax officials and administrators

[14]

. Ogunsola & Karztelnik, opines that fail to submit tax return lead to tax evasion

[11]

. Many informal operators are non regulated shadow economies which are often non registered for tax payment

[17]

Tax education, tax knowledge, tax audit, taxpayer attitudes are considered to positively influence tax compliance among the informal sector operators

[9, 10, 14-16]

. Wahua et al and Moore, affirm that formalization and registration of informal sectors enhance the tax compliance among the operators

[7, 17]

2.5. Theoretical Framework

The following theories are reviewed: Theory of Reasoned Action, Planned Behavioural theory and Fiscal Exchange Theory. Theory of Reasoned Action was propounded by Fishbein and Azjen (1975). Fishbein and Azjenproposed that an intention or action is created when individual attitude and behaviour coexisted

[3, 5]

. Ogunshola & Kasztelnik adopted this theory and opined that personality traits of individuals have influence on tax compliance

[11]

. This study suggests that tax compliance among the informal sector operators depends on the perception or attitude of the individual operator toward tax payment. The theory reflected the relationship between objective and subjected norms which represent individual's perception in the ability to achieve the intention. The theory only considered perceptions of tax payers which influence tax compliance. Other factors such tax education, tax knowledge, tax audit etc can also influence tax compliance. Planned Behavioural Theory was modified by Azjen,

[4]

. The theory proposes that a specific behaviour is not dependent on intention but on the belief that individual's ability to do such behaviour

[9]

. Behaviour of the taxpayer must be to comply with the government legislations on tax

[15]

. The attitude or behaviour of the taxpayers has effect on intention to comply with tax regulations

[9, 15]

. This theory is a modification to the Fishbein &Azjen theory of Reasoned Action. The theory only projected the taxpayers’ behaviours and attitudes. Another theory reviews in the study is Fiscal Exchange Theory. The theory was propounded by Mckerchar & Evan

[6]

. The theory assumed that taxpayers comply with relevant tax laws when they are satisfied with goods and services provided by the government

[8]

. This theory is relevant because it combines the responsibilities of both government and tax payers. Informal sectors operators will be willing to comply with tax laws if they are perceive that all tax revenue are judiciously utilized by government. This study is therefore grounded on the theory of Fiscal Exchange Theory. Tax Compliance can be achieved from the informal sectors if the operators are satisfied with public goods and services provided by the government.

2.6. Empirical Review

The following literatures are review to determine the state of research on the subject matter:

Ogungbade et al. investigate the effect of tax awareness and taxpayer's perception of government spending on tax evasion in informal sector of Ekiti State. A structured questionnaire was used to collect data from 150 respondents, 108 returned the completed questionnaires out of which only 100 respondents data were useful for analysis. The findings show that the taxpayer's awareness considerably reduced tax evasion while tax payers' attitudes only have significant moderating effect on the relationship between taxpayers' awareness and tax evasion

[10]

Moore examines the tax obsessions: tax payer registration and the informal sector in Sub Saharan Africa. The study adopts desk research by reviewing the existing literatures. Findings reveal three features of tax systems that are necessary to be examined in Sub Saharan Africa countries: Registration of more taxpayers, management efforts to collect more revenue and constantly use of the word informal sector lead to tax obsession among the operators

[7]

Ogunsola & Karztelnik explore observational study on tax compliance and tax evasion in Nigeria. Methods of generalization, analysis and synthesis of scientific literature, formalization and abstraction are adopted in the study. The article presents the results of an empirical analysis revealed that manufacturing companies deliberately fail to submit the required tax return documentation to avoid tax obligations

[11]

Sani investigates the effects of the tax compliance determinant on tax evasion in Nigeria. The study employed a survey design research approach to achieve the stated objective. A quantitative method was used. Data were collected using a structured questionnaire from a sample of SME operators in six states in North Eastern, North Central Zones and FCT Abuja. Tax morale, tax education and TH have positive impact on the tax compliance of taxpayers' while TD has negative impact

[15]

Mpofu studies challenges affecting informal sector tax administration, enforcement and compliance in African countries: Evidence from Zimbabwe. The study employed a sequential mixed method exploratory research design which supports the collection of qualitative data from various stakeholders using interviews observation and document analysis, supported by questionnaires for the quantitative part. The study employed thematic analysis with the use of NVVO Pro. 12 for the interview and SPSS for questionnaires. Findings reveal that information sector's potential to contribute more is stifled by structural and policy issues embedded in the existing tax systems such as complexity of tax systems, stakeholders’ engagement, high tax rates and aggressiveness of tax authorities

[7]

Wahua et al. explore best practices in the revenue mobilization from underground economies. The study used primary data collected from online sources using phrases such as tax collection from informal sectors, tax revenue collection from shadow economies, Taxation of underground economies. The study revealed that indirect taxes, WHT, presumptive taxes and formalization of informal sectors are the international best practices in tax revenue mobilization from underground economies

[17]

Tijjani et al study the impact of forensic accounting on tax payer attitude and compliance towards tax evasion within SMEs in the North East Nigeria. Cross sectional research design was used with data collected using simple random sampling. With the help of Smart PLS 3, Partial Least Square Structural Equation Modelling on 102 responses was utilizes to evaluate the data. The findings revealed that a forensic accounting check is required to address the issue of tax evasion in Nigeria to ensure a good attitude and compliance. Forensic accounting improves taxpayers’ attitude and tax compliance

[16]

Salawu et al. examine the determinants of tax non compliance behaviour among small and medium enterprises in Oyo State, Nigeria. Primary data were gathered using structured questionnaires for samples of 550 SMEs operators randomly selected within three local government areas in Ibadan the capital city of Oyo State. Descriptive statistics and probit logistic regression technique were used to analyze the data. The findings revealed that corruption of tax officials and administrators and tax compliance costs are the major determinants of tax non compliance. Tax knowledge, tax audit, tax penalty and tax amnesty are found to reduce tax non compliance among the SMEs taxpayers in Oyo State

[14]

Ogaluzor and Edori study the effect of tax education on tax compliance of informal sector operators in Abia and Rivers States. The study adopts the survey research design and select 120 respondents as sample size operating within the informal sector. The Pearson correlation was used in analyzing the 114 returned questionnaires retrieved. The study results show significant relationship between electronic taxpayer education, stakeholder's sensitization, print media taxpayer education and registration of new taxpayers timelyreturns filing, prompt payment of tax liabilities at a significant level 0.00

[9]

2.7. Gaps in the Literatures

Oyo North Senatorial district considerably harbours majority of informal sectors operators in Oyo State with major commercial cities like Ogbomoso, Iseyin and Saki. Existing literatures such Salawu et al and Ogungbade et al concentrated on the capital cities of the states which are Ibadan and Ado Ekiti respectively

[11, 14]

. Informal sectors like fashion designers, grinders, mansioners, carpenters and Barbers and Hairdressers in these major cities of the Senatorial district are often escaped the net of the relevant tax authorities. Low tax compliance from these categories have not been investigated in Oyo North Senatorial Districts.

3. Methodology

The study adopts survey research design using primary data extracted through the use of structured questionnaires in Likert style. All informal sectors operators with Oyo North Senatorial District are considered as the population of the study. About 975 samples are selected from the three geopolitical zones of the Senatorial constituency. These include: Ogbomoso zone: Ogbomoso North, Ogbomoso South and Orire local government councils; OkeOgun Zone 1: Iseyin, Iwajowa, Kajola and Itesiwaju local government councils and Oke Ogun Zone 2: Saki East, Saki West, Atisbo, Orelope, Olorunsogo and Irepo local government councils. Stratified sampling technique and intensity purposive sampling technique are adopted (Nyimbili&Nyimbili, 2024). The equal number of 75 questionnaires will be distributed to each local government area within the Senatorial District.Reliability test will be conducted on the questionaires. The study intends to adopts descriptive and inferential statistics to analyze primary data that will be gathered. The inferential statistics will be used to test the hypotheses formulated and draw conclusion. The rejection or acceptance will be base on 95% confident interval (5% level of significance).

4. Data Analysis Results

The above Table 1. showed demographic distributions of the selected informal sector operators selected from Tailors, Builders, Plumbers, Hair dressers/Barbers, Welders and vulcanizers in Ogbomoso, Iseyin and Saki Zones respectively. 975 questionnaires were administered but 823 questionnaires were properly filled and returned by the respondents. Therefore the data analysis is based on the data gathered from 823 respondents.

Interpretation

The above table showed the demographic distributions of the respondents. 230 (27.9%) respondents were tailors, 106 (12.9%) respondents were Bricklayers, 95 (11.5%) respondents were in plumbing business, 132 (16%) were inweldering business and 149 (18.1%) were in vulcanizing business. This indicated that the majority of informal sector operators who successfully filled the questionnaires were in tailoring business. Gender distribution were investigated, 230 (27.9%) respondents are male while 593 (72.15) respondents are female. This indicated that majority of informal sector operators in Oyo North Senatorial District are female.

Age distribution of the informal sector operators was also examined. The study revealed that 10 (1.2%) respondents fall with the age of 21-30 years, 10 (1.2%) respondents are within the age bracket of 31-40 years, 87 (10.6%) respondents are within age brackets of 41-50 yearswhile 716 (87.0%) respondents are within the age bracket of 51-60 years. This indicated that majority of informal sector operators within Oyo North Senatorial District are above 50 years.

4.1. Demographic Distribution

Table 1. Demographic Distribution.

Business Name	Frequency	Percent	Valid Percent	Cumulative Percent
Tailors	230	27.9	27.9	27.9
Bricklayers/Builders	106	12.9	12.9	40.8
Plumbers	95	11.5	11.5	52.4
Hair Saloon	111	13.5	13.5	65.9
Welders	132	16.0	16.0	81.9
Vulcanizers	149	18.1	18.1	100.0
Gender
Male	230	27.9	27.9	27.9
Female	593	72.1	72.1	100.0
Age
21-30 years	10	1.2	1.2	1.2
31-40 years	10	1.2	1.2	2.4
41-50 years	87	10.6	10.6	13.0
Academic Qualifications
SSCE	655	79.6	79.6	79.6
ND/NCE	100	12.2	12.2	91.7
B.Sc/HND	68	8.3	8.3	100.0
Experiences
1-5 years	490	59.5	59.5	59.5
6-10 years	327	39.7	39.7	99.3
11-20 years	6	.7	.7	100.0

Source: Researchers’ Field Work, 2025

The study showed that 655 (79.6%) respondents are Senior Secondary holders, 100 (12.2%) respondents are ND/NCE holders and 68 (8.3%) respondents are B. Sc/HND holders. The study concluded that majority of the informal sector operators are SSCE holders. Although informal sectors were characterized with illiteracy, but however, the some educated individuals take solace in Small and Medium Enterprises.

The study revealed that 490 (59.5%) respondents have been in the business for 5 years, 327 (39.7%) respondents have been in the business between period of 6 and 10 years, 6 (0.7%) respondents have in business between period of 11-20 years. The study therefore concluded that majority of the respondents have been in the informal sectors for more than five years.

4.2. Reliability Test

The Alpha Cronbach test revealed that all research questions outlined in the questionnaires are 56.7% reliable.

4.3. Test of Hypothesis

4.3.1. Test of Hypothesis One

Taxpayers’ awareness and education have no significant impact on informal sector tax compliance in Oyo North Senatorial District.

Table 2. Model summary.

Model Summary
Model	R	R Square	Adjusted R Square	Std. Error of the Estimate
1	.192^a	.037	.036	1.14478
a. Predictors: (Constant), Tax payers’ Awareness

The above Table 2. showed for test of goodness of fit of the model. The Adjusted R² is 0.036% which indicates that taxpayers’ awareness can explain about 3.6% of the changes in informal sector tax compliance in Oyo North Senatorial District. Other variables which are not captured in this study constitute about 96.4%. Therefore the Ho which proposes that the model does not satisfy the test of goodness fit is upheld. R also indicates the relationship between taxpayers’ awareness and tax compliance. This suggested that there is lower positive relationship between taxpayers and tax compliance, which is represented by 19.2%.

Table 3. Coefficients.

Coefficients^a
Model		Unstandardized Coefficients		Standardized Coefficients	t	Sig.
Model		B	Std. Error	Beta	t	Sig.
1	(Constant)	2.781	.105		26.370	.000
1	Taxpayers’ awareness	0.144	.026	-.192	-5.611	.000
a. Dependent Variable: Tax Compliance

The above table shows the coefficient table reflecting the impact of tax payers’ awareness which on informal sector tax compliance in Oyo North Senatorial District. Taxpayers’ awareness has positive and significant effect on tax compliance of β = 0.144 at PV> 0.05. This shows that as tax awareness increases the tax compliance increases significantly

The model to be formulated from above is

TC=β₀+TAβ₁

TC=2.781+0.144TA

Table 4. ANOVA.

ANOVA^a
Model		Sum of Squares	df	Mean Square	F	Sig.
1	Regression	41.261	1	41.261	31.484	.000^b
	Residual	1075.947	821	1.311
	Total	1117.208	822
a. Dependent Variable: Tax Compliance
b. Predictors: (Constant), Tax payers’ Awareness

The above table shows the analysis of variance. The F-value= 31.484 (p>0.05). This indicates that the H₀ which assumes that taxpayers’ awareness has no significant effect on tax compliance of the informal sectors in Oyo North Senatorial District is hereby declined while Hi is upheld. It is therefore concluded that Taxpayers’ awareness has significant impact on tax compliance of informal sectors in Oyo North Senatorial District

4.3.2. Test of Hypothesis Two

Table 5. Model Summary.

Tax payers’ perception has no significant impact of informal sector tax compliance in Oyo North Senatorial District
Model	R	R Square	Adjusted R Square	Std. Error of the Estimate
1	.206^a	.043	.041	1.14141
a. Predictors: (Constant), Tax payers’ Perceptions

The above showed the table for test of goodness of fit of the model. The Adjusted R² is 0.043% which indicates that taxpayers’ perceptions can explain about 4.3% of the changes in informal sector tax compliance in Oyo North Senatorial District. Other variables which are not captured in this study constitute about 95.7%. Therefore the Ho which proposes that the model does not satisfy the test of goodness fit is upheld. R also indicates the relationship between taxpayers’ perceptions and tax compliance. This suggested that there is lower positive relationship between taxpayers’ perceptions and tax compliance, which is represented by 20.6%.

Table 6. Coefficients.

Coefficients^a
Model		Unstandardized Coefficients		Standardized Coefficients	t	Sig.
Model		B	Std. Error	Beta	t	Sig.
1	(Constant)	1.179	.179		6.587	.000
1	Taxpayers’ Perception	.588	.097	.206	6.045	.000
a. Dependent Variable: Tax Compliance

The above table shows the coefficient table reflecting the impact of tax payers’ perceptions which on informal sector tax compliance in Oyo North Senatorial District. Taxpayers’ perception has positive and significant effect on tax compliance of β = 0.588 at PV> 0.05. This shows that changes in tax perceptions lead to corresponding changes in informal sectors’ tax compliance significantly.

The model to be formulated from above is

TC=β₀+Tpβ₁

TC=1.179+0.588Tp

Table 7. Analysis of Variance.

ANOVA^a
Model		Sum of Squares	df	Mean Square	F	Sig.
1	Regression	47.601	1	47.601	36.537	.000^b
	Residual	1069.607	821	1.303
	Total	1117.208	822
a. Dependent Variable: Tax Compliance
b. Predictors: (Constant), Taxpayers’ Perceptions

The above table shows the analysis of variance. The F-value= 36.537 (p>0.05). This indicates that the H₀ which assumes that taxpayers’ perceptions have no significant effect on tax compliance of the informal sectors in Oyo North Senatorial District is hereby declined while Hi is upheld. It is therefore concluded that Taxpayers’ perceptions have significant impact on tax compliance of informal sectors in Oyo North Senatorial District.

4.4. Discussion of Findings

The study had empirically tested the impact of taxpayers’ awareness and perceptions on the level of tax compliance among the informal sector’s operators in Oyo North Senatorial District, Oyo State. The study established that taxpayers’ awareness and their perceptions about the tax payments influenced tax compliance. This study outcome was in line with studies of Salawu et al, and Ogungbade et al

[1, 11]

. Taxpayers are not adequately informed and educated on the relevant tax information. Informal sector or shadow economy as often called are not duly registered and this constitute to low tax compliance. Many taxpayers within the informal sectors viewed taxes as money paid for the corrupt public office holders. Inadequate and absence of infrastructural facilities in the domain of these operators lead to massive evasion of taxes.

5. Conclusion and Recommendations

The study examined the impact of taxpayers’ awareness and perceptions on tax compliance within Oyo North Senatorial District, Oyo State. Oyo North District harboured over 60% of the informal operators within the state. The study affirmed and concluded that Taxpayers awareness and Taxpayers’ perceptions are factors influencing the tax compliance in the senatorial district. The study therefore recommends the following:

1) The relevant tax authority should embark on massive tax education in Oyo North Senatorial District in order to increase tax compliance. The informal tax education will change their perceptions about tax payment.

2) Tax perceptions of the relevant tax authority can only be changed or influenced if there are presence physical infrastructures. Government should embark provision social amenities which can be pinpointed by the informal sector operators.

Abbreviations

SMESs	Small and Medium Enterprises
WHT	Withholding Tax
FCT	Federal Capital Territory

Conflict of Interest

The authors declare no conflicts of interest.

References

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David, F. O., Olufisayo, B. A. (2025). Taxpayers' Awareness, Taxpayers' Perception, and Tax Compliance in the Informal Sector Within the Oyo North Senatorial District of Nigeria. Science Journal of Business and Management, 13(3), 187-195. https://doi.org/10.11648/j.sjbm.20251303.12

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David, F. O.; Olufisayo, B. A. Taxpayers' Awareness, Taxpayers' Perception, and Tax Compliance in the Informal Sector Within the Oyo North Senatorial District of Nigeria. Sci. J. Bus. Manag. 2025, 13(3), 187-195. doi: 10.11648/j.sjbm.20251303.12

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David FO, Olufisayo BA. Taxpayers' Awareness, Taxpayers' Perception, and Tax Compliance in the Informal Sector Within the Oyo North Senatorial District of Nigeria. Sci J Bus Manag. 2025;13(3):187-195. doi: 10.11648/j.sjbm.20251303.12

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@article{10.11648/j.sjbm.20251303.12,
  author = {Folayan Oluwadare David and Bello Adewale Olufisayo},
  title = {Taxpayers' Awareness, Taxpayers' Perception, and Tax Compliance in the Informal Sector Within the Oyo North Senatorial District of Nigeria},
  journal = {Science Journal of Business and Management},
  volume = {13},
  number = {3},
  pages = {187-195},
  doi = {10.11648/j.sjbm.20251303.12},
  url = {https://doi.org/10.11648/j.sjbm.20251303.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.sjbm.20251303.12},
  abstract = {This research paper examined the relationship between taxpayers' awareness, taxpayers' perception, and tax compliance in the informal sector within the Oyo North Senatorial District of Nigeria. The informal sector plays a significant role in the Nigerian economy but often faces challenges related to tax compliance. The study aimed to provide empirical evidence on how taxpayers' awareness and perception influence their compliance behavior in this sector. Through a comprehensive survey conducted among informal sector taxpayers in Oyo North Senatorial District, valuable insights were gathered regarding their awareness of tax obligations, perceptions of the tax system, and their compliance behaviors. The findings indicate that taxpayers' awareness of tax obligations has positive and significant influences their compliance with tax laws with β = 0.144 at PV> 0.05. The study also revealed that taxpayers' perceptions of the fairness and effectiveness of the tax system has positive and significant influence on tax compliance behavior β = 0.588 at PV> 0.05. Overall, the research underscores the need for targeted interventions aimed at enhancing taxpayers' awareness and fostering a positive perception of the tax system to promote higher levels of compliance in the informal sector of Oyo North Senatorial District, Nigeria. This study contributes to the existing literature on tax compliance behavior in developing countries and provides practical implications for policymakers, tax authorities, and other stakeholders involved in tax administration and enforcement efforts.},
 year = {2025}
}

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TY  - JOUR
T1  - Taxpayers' Awareness, Taxpayers' Perception, and Tax Compliance in the Informal Sector Within the Oyo North Senatorial District of Nigeria
AU  - Folayan Oluwadare David
AU  - Bello Adewale Olufisayo
Y1  - 2025/07/30
PY  - 2025
N1  - https://doi.org/10.11648/j.sjbm.20251303.12
DO  - 10.11648/j.sjbm.20251303.12
T2  - Science Journal of Business and Management
JF  - Science Journal of Business and Management
JO  - Science Journal of Business and Management
SP  - 187
EP  - 195
PB  - Science Publishing Group
SN  - 2331-0634
UR  - https://doi.org/10.11648/j.sjbm.20251303.12
AB  - This research paper examined the relationship between taxpayers' awareness, taxpayers' perception, and tax compliance in the informal sector within the Oyo North Senatorial District of Nigeria. The informal sector plays a significant role in the Nigerian economy but often faces challenges related to tax compliance. The study aimed to provide empirical evidence on how taxpayers' awareness and perception influence their compliance behavior in this sector. Through a comprehensive survey conducted among informal sector taxpayers in Oyo North Senatorial District, valuable insights were gathered regarding their awareness of tax obligations, perceptions of the tax system, and their compliance behaviors. The findings indicate that taxpayers' awareness of tax obligations has positive and significant influences their compliance with tax laws with β = 0.144 at PV> 0.05. The study also revealed that taxpayers' perceptions of the fairness and effectiveness of the tax system has positive and significant influence on tax compliance behavior β = 0.588 at PV> 0.05. Overall, the research underscores the need for targeted interventions aimed at enhancing taxpayers' awareness and fostering a positive perception of the tax system to promote higher levels of compliance in the informal sector of Oyo North Senatorial District, Nigeria. This study contributes to the existing literature on tax compliance behavior in developing countries and provides practical implications for policymakers, tax authorities, and other stakeholders involved in tax administration and enforcement efforts.
VL  - 13
IS  - 3
ER  -

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Author Information

Folayan Oluwadare David

Department of Accountancy, Osun State College of Technology, Esa Oke, Nigeria

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http://orcid.org/0009-0006-4969-5343
Bello Adewale Olufisayo

Department of Accountancy, Osun State College of Technology, Esa Oke, Nigeria

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APA Style

David, F. O., Olufisayo, B. A. (2025). Taxpayers' Awareness, Taxpayers' Perception, and Tax Compliance in the Informal Sector Within the Oyo North Senatorial District of Nigeria. Science Journal of Business and Management, 13(3), 187-195. https://doi.org/10.11648/j.sjbm.20251303.12

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ACS Style

David, F. O.; Olufisayo, B. A. Taxpayers' Awareness, Taxpayers' Perception, and Tax Compliance in the Informal Sector Within the Oyo North Senatorial District of Nigeria. Sci. J. Bus. Manag. 2025, 13(3), 187-195. doi: 10.11648/j.sjbm.20251303.12

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AMA Style

David FO, Olufisayo BA. Taxpayers' Awareness, Taxpayers' Perception, and Tax Compliance in the Informal Sector Within the Oyo North Senatorial District of Nigeria. Sci J Bus Manag. 2025;13(3):187-195. doi: 10.11648/j.sjbm.20251303.12

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@article{10.11648/j.sjbm.20251303.12,
  author = {Folayan Oluwadare David and Bello Adewale Olufisayo},
  title = {Taxpayers' Awareness, Taxpayers' Perception, and Tax Compliance in the Informal Sector Within the Oyo North Senatorial District of Nigeria},
  journal = {Science Journal of Business and Management},
  volume = {13},
  number = {3},
  pages = {187-195},
  doi = {10.11648/j.sjbm.20251303.12},
  url = {https://doi.org/10.11648/j.sjbm.20251303.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.sjbm.20251303.12},
  abstract = {This research paper examined the relationship between taxpayers' awareness, taxpayers' perception, and tax compliance in the informal sector within the Oyo North Senatorial District of Nigeria. The informal sector plays a significant role in the Nigerian economy but often faces challenges related to tax compliance. The study aimed to provide empirical evidence on how taxpayers' awareness and perception influence their compliance behavior in this sector. Through a comprehensive survey conducted among informal sector taxpayers in Oyo North Senatorial District, valuable insights were gathered regarding their awareness of tax obligations, perceptions of the tax system, and their compliance behaviors. The findings indicate that taxpayers' awareness of tax obligations has positive and significant influences their compliance with tax laws with β = 0.144 at PV> 0.05. The study also revealed that taxpayers' perceptions of the fairness and effectiveness of the tax system has positive and significant influence on tax compliance behavior β = 0.588 at PV> 0.05. Overall, the research underscores the need for targeted interventions aimed at enhancing taxpayers' awareness and fostering a positive perception of the tax system to promote higher levels of compliance in the informal sector of Oyo North Senatorial District, Nigeria. This study contributes to the existing literature on tax compliance behavior in developing countries and provides practical implications for policymakers, tax authorities, and other stakeholders involved in tax administration and enforcement efforts.},
 year = {2025}
}

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TY  - JOUR
T1  - Taxpayers' Awareness, Taxpayers' Perception, and Tax Compliance in the Informal Sector Within the Oyo North Senatorial District of Nigeria
AU  - Folayan Oluwadare David
AU  - Bello Adewale Olufisayo
Y1  - 2025/07/30
PY  - 2025
N1  - https://doi.org/10.11648/j.sjbm.20251303.12
DO  - 10.11648/j.sjbm.20251303.12
T2  - Science Journal of Business and Management
JF  - Science Journal of Business and Management
JO  - Science Journal of Business and Management
SP  - 187
EP  - 195
PB  - Science Publishing Group
SN  - 2331-0634
UR  - https://doi.org/10.11648/j.sjbm.20251303.12
AB  - This research paper examined the relationship between taxpayers' awareness, taxpayers' perception, and tax compliance in the informal sector within the Oyo North Senatorial District of Nigeria. The informal sector plays a significant role in the Nigerian economy but often faces challenges related to tax compliance. The study aimed to provide empirical evidence on how taxpayers' awareness and perception influence their compliance behavior in this sector. Through a comprehensive survey conducted among informal sector taxpayers in Oyo North Senatorial District, valuable insights were gathered regarding their awareness of tax obligations, perceptions of the tax system, and their compliance behaviors. The findings indicate that taxpayers' awareness of tax obligations has positive and significant influences their compliance with tax laws with β = 0.144 at PV> 0.05. The study also revealed that taxpayers' perceptions of the fairness and effectiveness of the tax system has positive and significant influence on tax compliance behavior β = 0.588 at PV> 0.05. Overall, the research underscores the need for targeted interventions aimed at enhancing taxpayers' awareness and fostering a positive perception of the tax system to promote higher levels of compliance in the informal sector of Oyo North Senatorial District, Nigeria. This study contributes to the existing literature on tax compliance behavior in developing countries and provides practical implications for policymakers, tax authorities, and other stakeholders involved in tax administration and enforcement efforts.
VL  - 13
IS  - 3
ER  -

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