IMPACT OF DIGITAL INNOVATION ON TAX COMPLIANCE IN NIGERIA’S INFORMAL ECONOMY

The informal economy is a good percentage of economic activates in Nigeria including activities that are not within the ambit of formal regulatory mechanism. An informal economy that are small-scale enterprises, street hawkers, and other self- employed activities come together to provide a large chunk of employment and energizes the economy (Osemeke, Nzekwu & Okere, 2020). The national Bureau of Statistics estimated that the informal sector takes about 65 percent of total employment (NBS, 2022), with about 50 percent of the nation’s gross domestic product (GDP). With this much relevance, challenges in regard to compliance with tax remain rampant at the level of the informal sector mainly because many of the operators stay out of the formal tax framework. Lately, innovations in the digital world, especially mobile payment platforms, have cropped up as potential mechanisms for raising the level of tax compliance among operators of the informal sector (Iredele, Ogunleye & Obe, 2018).