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

This is the authors' abstract. We don't add key points for this paper.

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.