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

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.