Financial literacy and tax management among market traders in northern Peru: the moderating role of business formalisation

Background In Peru, 41% of adults do not reach a minimum level of financial literacy, and informal employment exceeds 86% in Cajamarca and Amazonas. Little is known about whether market traders’ financial knowledge shows in how they handle their taxes, or about the conditions that change this relationship. This study estimated it in two markets in northern Peru, with accounting digitalisation, business formalisation and digital financial transformation as moderators. Methods Quantitative, observational, cross-sectional study with a non-probability sample of 218 traders from the markets of Chota (n = 109) and Bagua Grande (n = 109) in 2026. A 36-item Likert questionnaire, validated by expert judgement, was used, with Cronbach’s alpha between 0.927 and 0.977. Twenty-one linear regressions with interaction terms and centred predictors were estimated, with HC3 standard errors and bootstrap intervals from 5000 resamples for each interaction. Results Low financial literacy was found in 28.0% of traders and low tax management in 33.5%. Financial literacy had a positive partial effect on tax management (b between 0.446 and 0.519, p < 0.001), and only business formalisation moderated this effect (b = 0.053, 95% CI 0.008 to 0.096). The three dimensions of financial literacy were associated with tax management without moderation, and formalisation strengthened the effect on digital tax compliance (b = 0.071, 95% CI 0.011 to 0.130), which held without influential cases. Conclusions Financial literacy goes hand in hand with better tax management, above all in formalised businesses. Common method bias and the closeness between constructs mean these coefficients should be confirmed with data from other sources, such as tax administration records.