A recent report has revealed that up to 98% of Nigerians operating in the informal economy pay taxes daily, with some businesses paying taxes 3 times a day. In Lagos, for instance, some bus drivers pay as much as N3,000 a day in taxes to different groups.
- This report by socioeconomic research firm, SBM Intel, titled “Under the Hood: A look into Nigeria’s informal sector,” states that the informal sector plays a crucial role in many economies and accounts for 60% of the global workforce.
Highlights of the report
- 98% of Nigerians in the informal sector pay taxes.
- 54% of Nigerians earn a daily income between N2100 and N5000 a day, and 38% earn 5000 and above.
- Those earning N5000 and above a day include Bus drivers (52%), Open Market traders (52%), Okada riders (48%), Hairdressers (33%), and Dressmakers (30%).
- The lowest tax bracket (N2,400- N12,000 a year) comprises Okada riders (66%), Hairdressers (61%), and Vulcanizers (62%).
- For yearly tax payment, 14% of drivers pay N36,000 and above, while 18% of bus drivers pay between N24,000 and N36,000 a year.
- In the most common tax brackets per day for bus drivers, drivers in Lagos state (67%) pay N3,000 per day; Delta state (89%) — N2100-N3000 per day; Kano (92%) — N50-N200; and Oyo (77%) — N210-N500.
- In case of default in tax payment, 50% of respondents revealed that their wares and equipment got seized, 32% said they got fined, 5% cited cases of arrest, while 13% said they experienced cases of violence if they defaulted on taxes.
- The report also revealed different frequencies of payments, with 45% of respondents saying they paid taxes daily, 33% yearly, 17% monthly and 5% weekly. Meanwhile on the frequency of daily payments, 63% said once a day, 19% twice a day, and 18% reported thrice a day or more.