ADDRESSING INFORMALITY IN NIGERIA’S CONSTRUCTION INDUSTRY: THE ROLE OF DIGITALIZATION AND TAX AWARENESS IN ENHANCING REVENUE GENERATION
Abstract
The construction industry is a significant contributor to economic growth and infrastructural development in Nigeria. However, a substantial portion of the sector operates informally, outside government regulation, taxation, and official documentation. This informality significantly reduces government revenue, encourages tax evasion, weakens regulatory oversight, and undermines economic planning. This paper examines the causes of informality in Nigeria’s construction industry, its adverse effects on revenue generation, and practical strategies for formalizing the sector. The paper argues that reducing informality in the construction sector of Nigerian economy requires a deliberate, rigorous, and sustained policy effort aimed at improving formalization mechanisms, strengthening regulatory compliance, and expanding the tax base. Such concerted interventions have the potential to transform informal economic activities into a more productive source of government revenue, thereby enhancing fiscal capacity and supporting national development. The study concludes that strengthening regulatory frameworks, expanding digital tax systems, and promoting taxpayer education are essential for improving compliance and increasing national revenue. It suggests that absolute digitalization and stringent policy framework should be put in place to create tax awareness that will ensure tax compliance.
Keywords: Informality, Construction Industry, Nigeria, Digitalization, Tax Awareness, Revenue Generation
Pedro A. Ugwoegbulem1, Alex O. Nwachukwu2 and Davidson Idubor3
1, 2 & 3Department of Building Construction/ Woodwork Technology Education, School of Industrial Technical Education, Federal College of Education (Technical), Umunze, Anambra State, Nigeria
E-mail: 1pedropeters1967@gmail.com, & 2alexonyema62@gmail.com