This study examines the effects of informal taxation on the income of agricultural traders in Benue State, Nigeria, using the Structural Equation Model (SEM) as the analytical framework. Informal taxation is conceptualized to include unauthorized levies, illegal checkpoint fees, harassment-related bribes, and other illicit exactions imposed on traders outside the formal tax system. The findings reveal that informal taxation has a positive and statistically significant effect on the cost of trading agricultural products at the 5% level of significance. Furthermore, the results indicate that informal taxation exerts a negative and statistically significant effect on traders' income at the 5% significance level. The study concludes that informal taxation increases transaction costs associated with agricultural trade, thereby reducing the income of agricultural traders. To address these challenges, the study recommends that the Benue State Government strengthen enforcement against unauthorized tax collections through the prosecution of individuals and groups involved in illegal revenue collection, while enhancing public awareness of approved tax and fee structures. The study also advocates the adoption of automated and digital tax payment systems to eliminate cash-based transactions, alongside the harmonization of taxes and levies to improve transparency, reduce informal taxation, and enhance the efficiency of agricultural markets.