The Nexus Between Taxation and Gender-Based Informality: Evidence from Nigerian Enterprise Survey Data

Article DOI: https://doi.org/10.57017/jaes.v17.3(77).06

Author(s):

Suleiman TAHIR Monetary Policy Department, Central Bank of Nigeria, Federal Ministry of Finance, Nigeria
Ahmadu SANDA Department of Economics, Faculty of Social Sciences, Usmanu Danfodiyo University, Nigeria
Dal DIDIA Department of Business Administration, Jackson State University, Mississippi, USA
Baban HASNAT Department of Business Administration, State University of New York, Brockport, USA

Abstract:

Using the Nigerian enterprise survey data, this paper examines whether there is a gender dimension in the capacity of informal firms to contribute to tax revenues, a more specific question asked is whether tax rates and female gender ownership effects informality. Gender categorisation of the firm’s ownership shows an overwhelming dominance of men holding over women, with a favourable ratio of 6:1 of the total sample. The results of the investigation on firms owned by females revealed that they are more likely to remain in the informal sector. By using the cross-sectional logit regression approach, we found no statistical significance between tax rates and a firm’s propensity to join the informal sector. It explains a typical scenario where the tax rates mechanism has failed to transmit effectively. Finally, we attained a divergent policy indication that suggests tax compliance enforcement and incentivising female firms’ owners, among other measures.

Copyright© 2022 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.

How to cite:

Tahir, AS., Sanda, A., Didia, D., Hasnat, B. (2022). The Nexus Between Taxation and Gender-Based Informality: Evidence from Nigerian Enterprise Survey Data. Journal of Applied Economic Sciences, Volume XVI, Fall, 3(77), 237–249. https://doi.org/10.57017/jaes.v17.3(77).06

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