CHALLENGES OF TAX COMPLIANCE AMONG SMALL BUSINESSES IN ANYIGBA, KOGI STATE

ABSTRACT This study investigates the multifaceted challenges affecting tax compliance among small businesses in Anyigba, Kogi State, Nigeria. Recognizing the significant role that small enterprises play in local economic development, the research explores how socio-economic, administrative, and informational factors influence tax behavior in a semi-urban context. A descriptive survey design was adopted, with data collected from 169 small business owners using structured questionnaires. Findings reveal that low income levels, high operational costs, limited financial literacy, and poor record-keeping are major socio-economic barriers to tax compliance. Additionally, the study highlights inadequate awareness of tax obligations, complex filing procedures, and perceptions of unfair treatment by tax authorities as critical deterrents. Respondents expressed general dissatisfaction with the transparency and efficiency of tax administration, while also identifying the absence of targeted education and incentives as hindrances to voluntary compliance. To address these challenges, the study recommends regular taxpayer education, simplification of tax processes, adoption of digital tax platforms, and introduction of incentives for compliant businesses. The research contributes to the existing literature by offering context-specific insights from a semi-urban Nigerian setting and proposes a framework centered on education, simplification, digitization, and incentivization to enhance tax compliance. This framework holds relevance for policymakers, tax administrators, and stakeholders aiming to strengthen the tax system and improve revenue generation from the SME sector in Nigeria.