The Federal and State Governments might not be able to provide infrastructural development for its citizens, if the citizens do not pay tax. Successive government officers and tax administrators in Nigeria have come up with different programs on how to increase tax collection. Each of these programs has been unsuccessful due to lack of accountability, poor awareness and publicity, and poor implementation. Recently, Anambra state took the unusual step of developing a digital (online) business registration to capture taxpayers in the Informal Economy (IE). This digital registration called, Anambra Social Service Identity Number (ANSSID) has witnessed massive success. Despite the increase in the number of business registration, businesses and employees in the IE are finding it difficult to pay tax in Anambra State. By using documentary analysis and semi-structured interviews with 35 respondents across different industries in Anambra State, this research contributes and offers guidance to policy makers on how to improve tax revenue in the state. This study found that lack of provision of amenities and infrastructural development are among the reasons why many traders and employees do not pay tax in Anambra State, Nigeria, as they have to bear the burden for the provision of such amenities themselves. Lack of accountability, embezzlement, poor accounting records, deficit of empowerment programs and absence of awareness are the key reasons why people and businesses in IE do not pay tax. Recommendations were made to help policy makers improve their tax revenue.