The Federal Inland Revenue Service, FIRS, has launched a technologically driven initiative that enables collection of Value Added Tax, VAT, by Market Traders Association of Nigeria, MATAN, and other informal sector operators to curb multiple taxation at the grassroots.
The association, with a membership of over 40 million traders across the country, is the biggest player in Nigeria’s market space.
Details of the FIRS’ partnership with MATAN was disclosed on Thursday at a stakeholders’ engagement programme on the VAT DIRECT Initiative, VDI, held in Lagos, according to Mr. Johannes Wojuola, Special Assistant to the Chairman of FIRS on Media and Communication.
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.
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 Value Added Tax, VAT, using technology.
Speaking during the stakeholders’ engagement, Mr. Muhammad Nami, Executive Chairman of FIRS said the initiative was crucial to revenue generation and also to eliminating multiple taxation, especially in the informal sector.
According to him, government is worried about the multiplicity of taxes, and that the FIRS and JTB are working on modalities of addressing this challenge.
The FIRS/ MATAN partnership, he noted, 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 added that the FIRS would collaborate with security agencies, especially the Nigeria Police, to deal with illegal tax collection by touts in markets.
“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 said.
He noted further 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.
“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 characterized 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,” he said
He said to ensure transparency and accountability of the project operations, a combined monitoring and evaluation team, comprising both organisations, would be formed.
Nami 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 representatives of the Joint Tax Board,, JTB, Deposit Money Banks, DMBs, 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.