FIRS phases out multiple taxation, brings informal sector players into tax pot
By Jeph Ajobaju, Chief Copy Editor
Multiple taxation is being phased out by the Federal Inland Revenue Service (FIRS) and it has included the Market Traders Association of Nigeria (MATAN) and other informal sector operators in the Value Added Tax (VAT) pot to raise tax yield.
MATA has a membership of over 40 million traders across the country and is the biggest player in national market space.
Details of the FIRS/MATAN partnership were disclosed at a stakeholders’ engagement on the VAT Direct Initiative (VDI) held in Lagos, according to a statement issued by Johannes Wojuola, Media Aid to FIRS Chairman Muhammad Nami.
The event was attended by representatives of the FIRS, JTB, banks, Iyalojas of markets from across the country, members of various trade clusters, and representatives from all major markets nationwide.
The FIRS will collaborate with MATA on technology to enumerate traders for collecting and remitting VAT to the FIRS, with hopes of it leading to an expansion of the tax net and more revenue for the federation.
Nami explained at the event the initiative is crucial to revenue generation and will also help eliminate multiple taxation, especially in the informal sector.
He said Abuja is concerned about the multiplicity of taxes, and the FIRS and the Joint Tax Board (JTB) are working on ways to tackle the challenge.
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Partnership lays foundation to eliminate multiple taxation, extortion
According to him, the partnership laid a very good foundation for the government to address multiple taxation and extortion by tax officials, tax agents and 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,” Nami said, according to reporting by Vanguard.
“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.
“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.”
To ensure transparency and accountability of the project operation, Nami disclosed, a monitoring and evaluation team comprising both organisations would be formed.
He also unveiled an identity card to be given to each trader upon enumeration. The card contains tax identification number and other personal details.