Multiple taxation: FIRS partners traders’ association for informal sector VAT remittance

The Federal Inland Revenue Service (FIRS) has partnered with the Market Traders Association of Nigeria (MATAN) to collect and remit Value Added Tax (VAT) to the Service from the country’s markets, particularly in the informal sector.

MATAN, with a membership of over 40 million traders across Nigeria’s 774 local governments, 36 states, and the Federal Capital Territory (FCT), holds a prominent position in the country’s market space.

The details of the FIRS’ collaboration with MATAN were revealed during a stakeholders’ engagement program on the VAT DIRECT Initiative held on Thursday.

Through this partnership, the FIRS will work together with the association to employ technology for enumerating traders and facilitating the collection and remittance of VAT to the Service. This initiative aims to expand the tax net and increase revenue for the Federation.

The VAT DIRECT Initiative (VDI) is a program designed to foster cooperation between the FIRS and the market, particularly the informal sector, in the collection and remittance of Value Added Tax (VAT) using technology.

During the Stakeholder Engagement, Mr Muhammad Nami, Executive Chairman of the FIRS, emphasized that this initiative was the first of its kind and crucial for revenue generation, as well as eliminating multiple taxations, particularly in the informal sector.

As the Chairman of the Joint Tax Board (JTB), Mr Nami further stated that the government is concerned about the issue of multiple taxes. The FIRS and JTB are working on various strategies to address this challenge, and this partnership with MATAN has laid a strong foundation for the government to tackle the issue of multiple taxation and extortion by tax officials, agents, and touts in the market.

Mr Nami also highlighted that the Service would collaborate with security agencies, especially the Nigeria Police, to combat illegal tax collection by touts in markets.

He stated, “One important area of our collaboration is the issue of providing adequate security in the markets. We are aware of the challenges that you have faced in the past with miscreants, self-imposed tax collection agents, and touts. I want to assure you that as part of this initiative, we will be collaborating with the relevant security agencies, particularly the Nigeria Police Force, to tackle all forms of touting and illegal tax collection by miscreants and keep them away from your markets.”

Furthermore, Mr. Nami emphasized that the success of this collaboration would lead to increased revenue for the country, which would in turn provide the government with the necessary resources to fund infrastructure and other social amenities.

He added, “The successful outcome of this collaboration and the additional revenue generated will have multiplier effects on all sectors of the economy. An improved VAT collection will enhance the revenue base of the states and local governments at the sub-national level, and the citizens will ultimately benefit.

This initiative is very important to the government, particularly at this moment of dwindling revenues from the petroleum sector, and therefore, it requires that we put all hands on deck and optimally explore all available opportunities.”

To ensure transparency and accountability in the project’s operations, a joint monitoring and evaluation team comprising representatives from both organizations will be formed, as announced by Mr Nami during the stakeholders’ engagement.

Additionally, the Executive Chairman of the FIRS unveiled an Identity Card during the event. Each trader will be issued this card upon enumeration, which will contain their tax identification number and other personal details.

The VAT Direct Initiative Stakeholder Engagement was attended by the Secretary of the Joint Tax Board, representatives from Deposit Money Banks, Iyalojas of Markets across the country, members of various trade clusters, representatives from major markets nationwide, and officers of the Federal Inland Revenue Service.

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