The Nigerian Government through the Federal Inland Revenue Service, FIRS, announced the VAT Direct Initiative, a scheme that would enable FG to collect Value Added Taxes from the informal sector and reduce multiple taxations in the informal economy.
The FIRS disclosed this in a statement on Monday afternoon, stating that it FIRS is partnering with the Market Traders Association of Nigeria to collect & remit VAT from their members especially those in the informal sector using a unified systems technology.
The FIRS is the agency responsible for collecting Valued Added Taxes in Nigeria and other revenues accruable to the FG.
MATAN
The Market Traders Association of Nigeria, founded in 1995, in the statement revealed that it is the largest player in Nigeria’s informal market space with a membership of over 40 million
The FIRS noted that it is partnering with MATAN to collect and remit Valued Added Taxes from their members- especially those in the informal, adding:
- “This collaboration is known as VAT Direct Initiative,
- “A collaboration between FIRS and MATAN where MATAN promotes awareness on VAT collection and remittance in the marketplace and informal sector, while also simplifying VAT payment and remittance for the marketplace and informal sector using a purpose-built digital platform.
Digital scheme
They also noted that MATAN has a digital platform that enumerates their members giving them a digital ID card and tracks their turnover so that VAT accrued is collected and remitted to the FIRS, adding:
- “The Initiative is the first of its kind that will utilize technology to foster collaboration between the FIRS and the marketplace for the collection and remittance of VAT.
FIRS says this will help tackle multiple taxations in the marketplace through partnerships with security agencies to curb the activities of touts and self-imposed tax collectors.
- “This will also boost VAR revenue generation for the three tiers of government, which in turn means more money to fund infrastructure and social amenities.”
MATAN members will each receive an ID card upon enumeration, which would contain their Tax Identification Number and other personal details.
What you should know
Nigeria’s Value Added Tax (VAT) increased by 1.75% on a quarter-on-quarter basis, reaching N709.59 billion in Q1 2023.
The manufacturing sector accounted for the largest share of VAT collection in Q1 2023 at 29.65%.
Information and communication followed with a share of 19.29%, while mining & quarrying contributed 12.24% to VAT collection during the same period.
This is a tough assignment because most of the.goods sold in the markets are already subject to VAT at the production sites. So another VAT in the market is a multiple
One will understand if Firs is telling us they are using the initiative to bring more people into the tax net for personal income tax. Most of these people do not keep proper books of Account. Thirdly, they live below poverty line yet their names are not on the poor peoples list. There are lots of issues around this initiative
The people are beginning to ask what will.my country do for me considering the corruption and wastage levels in the country
When exactly will the masses of this country called Nigeria stop to expect the unexpected from government and begin to enjoy dividend of democracy? May God have mercy on us.
Since the coming of the government all we gear is tax this and tax that and subsidy this and subsidy that. On every front it’s all about the masses been milked , we can’t see anything that the government have done apart from being in self serving functions where they flips the hems of their Agbada up and down.
This approach is quite commendable but the timing is bad. If it is going to eradicate multiple taxation, its good. When u buy things from malls or a NY store, iyour payment is taxed, when you lodge in a hotel, they tax you upon payment and many other services like that. Why can’t we have a unified taxation that erase multiple taxation and ease the burden on Nigerians?
Very wrong move. Has the government provided amenities (electricity, water and good roads) in these markets to warrant a taxation? Trust is lacking here. The should provide basic amenities before talking about taxation.