The Federal Inland Revenue Service has partnered with the Market Traders Association of Nigeria to collect and remit Value Added Tax to the FIRS from the country’s markets, especially in the informal sector.
According to available information, the association has a membership of well over 40 million traders across Nigeria.
This cuts across the country’s 774 local governments, 36 States and the Federal Capital Territory, which makes it the biggest player in Nigeria’s market space.
The details of the FIRS’ partnership with MATAN was disclosed at a Stakeholders Engagement Programme on the VAT DIRECT Initiative held on Thursday in Lagos State.
The partnership will see the FIRS collaborating with the association to deploy technology to enumerate traders for collecting and remitting VAT to the Service, consequently leading to an expansion of the tax net and increased revenue for the Federation.
The VAT DIRECT Initiative is a programme designed to foster collaboration between the FIRS and the market place, especially the informal sector, in the collection and remittance of VAT using technology.
Speaking during the Stakeholder Engagement, Muhammad Nami, Executive Chairman of the FIRS, highlighted that the initiative was the first of its kind and that it was crucial to revenue generation and also to eliminating multiple taxation, especially from the informal sector.
The Executive Chairman of the FIRS, who is also the Chairman of the Joint Tax Board, further stated that the government was worried about the multiplicity of taxes.
Nami said the Service and JTB were working on various modalities of addressing this challenge and that this partnership has laid a very good foundation for the government to address the issue of multiple taxation and extortion by tax officials, tax agents and touts in the market place.
He further noted that the Service would collaborate with security agencies, especially the Nigeria Police, to deal with illegal tax collection by touts in markets.
He said: “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.”
Nami further noted that the success of this collaboration would lead to increased revenue for the country and in turn provide government the needed resources to fund infrastructure and other social amenities.
He added: “The successful outcome of this collaboration and additional revenue accruable will have multiplier effects on all sectors of the economy as the government will have more revenue to provide the needed social amenities and infrastructure in critical sectors.
“An improved VAT collection will improve the revenue base of the States and Local Governments at the sub-national level and the citizens will be the ultimate beneficiaries.
“This initiative is very important to the government, particularly at this moment of dwindling revenues from the petroleum sector and therefore, requires that we put all hands on deck and optimally explore all available opportunities.
“The administration of VAT in the informal sector is characterised mainly by a low level of compliance and a lack of awareness in terms of obligation and liability.
“It, therefore, becomes necessary to leverage the MATAN platform to positively change the status quo.”
Nami also noted that to ensure transparency and accountability of the project operations, a combined monitoring and evaluation team comprising both organisations would be formed.
During the Stakeholder Engagement, the Executive Chairman, FIRS also unveiled an Identity Card that is to be given to each trader upon enumeration.
The card contains 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 all major markets across the country, as well as officers of the Federal Inland Revenue Service.
[TheEagleonline]