Abstract
Tax compliance among Small and Medium Enterprises (SMEs) in Nigeria remains low despite the introduction of digital tax reforms by the Nigeria Revenue Service (NRS) and state internal revenue services. This study statistically evaluated tax compliance behavior among SMEs in Kano State, focusing on the effects of digitalization, socio-economic factors, and perceptions. A cross-sectional survey of 500 SMEs was conducted using stratified random sampling across urban and rural local government areas. Structured questionnaires were administered, and 460 valid responses were analyzed using descriptive statistics, chi-square tests, and binary logistic regression. The main challenge identified was extremely low awareness of digital tax platforms (only 32.6%) and poor digital literacy among SME owners, with 44.3% rated as having low digital skills. Results showed that only 38.4% of SMEs were fully tax compliant. Logistic regression revealed that digital literacy (OR=3.27, p<0.001), awareness of digital platforms (OR=2.51), education (OR=2.41), perceived fairness (OR=2.15), and prior tax education (OR=1.98) significantly predicted compliance. Business size and years in operation were not significant. The model correctly classified 79.4% of cases. The study recommends mandatory tax literacy programs, simplified mobile tax interfaces in local languages (Hausa), and linking tangible public services to tax payment to improve perceived fairness and voluntary compliance.