TAX ADMINISTRATION IN THE INFORMAL SECTOR: KWARA STATE INTERNAL REVENUE SERVICE PERSPECTIVE
Mohammed Aminu Yaru 1,2 & Muritala Awodun3
1Department of Economics, University of Ilorin, Ilorin
2Research and Data Gathering Department, Kwara State Internal Revenue Service, Ilorin
3Office of the Executive Chairman, Kwara State Internal Revenue Service, Ilorin
Taxation in the informal sector has been very challenging for most tax authorities in Nigeria. The sector is largely characterised by low voluntary tax compliance. This study examines the challenges facing tax administration in the informal sector in Kwara State and the impact of measures taken by Kwara State Internal Revenue Service (KW-IRS) particularly, the Community Impact Programmes (CIPs)—direct and indirect intervention programmes to inspire voluntary tax compliance in the informal sector of the State. Survey research design was used for the study. A total of 56 staff from a population of 83 staff deployed to the Informal Sector Directorate of KW-IRS as at the period of the survey were sampled and descriptive statistical methods were used to analyse the results. The study finds that CIPs are impactful, but would not suffice in sustaining high level of tax compliance. Government therefore should provide basic social amenities to citizens in order to inspire voluntary tax compliance, and enforce penalties for those who evade tax payment.
Keywords: Tax Administration, Informal Sector, Kwara State