Working Paper 236
Informal taxation led by traditional authorities and community groups has long played a central role in financing local public goods and services across many Nigerian communities. Yet, despite the importance of informal taxation, relatively little research has examined how these institutions function as tax authorities or how accountability is structured within them. This study explores how accountability in informal taxation varies across two distinct governance contexts in Kaduna State: Zaria, where informal taxation is embedded within the emirate system and influenced by Islamic norms, and Chikun, where taxation is administered through chiefdom structures and largely Christian communities. Drawing on 103 interviews with traditional leaders, elites, and subgroup leaders, the study analyses local understandings and practices of transparency, answerability, and responsiveness.
Three key forms of informal taxation were identified in both regions: community development levies paid by households, presumptive tax-like payments by shop owners, and user fees paid to access market facilities. While these taxes serve similar purposes, the norms and processes surrounding their administration differ across the two areas. Both Zaria and Chikun display mixed expressions of accountability. In Zaria, informal tax decisions are largely made by traditional leaders and elites, with limited community involvement. Some households request anonymity in tax records due to religious beliefs, yet respondents reported a high degree of trust in leaders and timely delivery of community projects. In Chikun, by contrast, community members participate more actively in tax decisions, and tax records are openly maintained. However, efforts to rebuild trust following past instances of misappropriation, along with lengthy deliberation processes, sometimes lead to delays in project implementation. Although based on a non-representative sample, the findings offer insight into how local authority structures, religious norms, and community expectations shape accountability in informal taxation in areas with different governance structures in Kaduna State.
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How faith and culture shape accountability in Nigeria’s informal tax system
