Impact of informal sector tax revenue on capital growth in Ebonyi State Capital, Abakaliki

Abstract

The study examined the effect of informal sector tax revenue on capital growth in Ebonyi State Capital, Abakaliki. The study adopted Ex-post facto research design in obtaining secondary data, covering 21 years (2000–2020) from the State Internal Revenue Service and the Ministry of Budget and Planning, Abakaliki. The data collected were tested using Ordinary Least Square (OLS) regression. The findings revealed that tax collected from Traders’ unions, Petty traders, and Market men and women had a significant effect on capital growth in Abakaliki, the State Capital. This is evident from the monumental capital projects being executed by the government in Abakaliki, the capital city. The study recommended that the government should not only create an enabling environment for the informal sector to thrive but should also give all necessary assistance/support for its survival because the sector has contributed to the capital development of the state capital through the tax revenue generated.