The Federal Inland Revenue Service (FIRS) has collaborated with the Market Traders Association of Nigeria (MATAN) to collect and remit Value Added Tax (VAT) to the FIRS from the country’s marketplaces, particularly in the informal sector.
The Association, which has over 40 million members spread over the country’s 774 local governments, 36 states, and the Federal Capital Territory, is the most powerful participant in Nigeria’s market.
The FIRS’ collaboration with MATAN was revealed at a Stakeholders Engagement Programme on the VAT DIRECT Initiative held in Lagos State.
The FIRS will partner with the association to deploy technology to enumerate traders for the purpose of collecting and remitting VAT to the Service, resulting in an expansion of the tax net and greater revenue for the Federation.
The VAT DIRECT Initiative (VDI) is a program designed to foster collaboration between the FIRS and the market place, especially the informal sector, in the collection and remittance of the Value Added Tax (VAT) using technology.
Speaking during the Stakeholder Engagement, Mr. Muhammad Nami, Executive Chairman 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, FIRS who is also the Chairman of the Joint Tax Board (JTB) further stated that the government is worried about the multiplicity of taxes, and that 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.
Mr. 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 also stated that a unified monitoring and assessment panel comprised of both organizations would be formed to ensure openness and accountability of project operations.
During the Stakeholder Engagement, the Executive Chairman of FIRS also introduced an Identity Card, which will be handed to each trader upon enumeration and will contain their tax identity number and other personal information.
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.