The Federal Inland Revenue Service (FIRS) has partnered with the Market Traders Association of Nigeria (MATAN) through VAT DIRECT Initiative (VDI) to collect and remit Value Added Tax (VAT) to the FIRS from the country’s markets.
According to a statement by the Special Assistant to the FIRS Executive Chairman, Johannes Oluwatobi Wojuola, details of the FIRS’ partnership with MATAN was disclosed at a Stakeholders Engagement Programme on the VAT DIRECT Initiative, held in Lagos State on Wednesday.
The statement added that, the partnership between FIRS and MATAN will enable the deployment of technology to enumerate it’s member for collecting and remittance of VAT to the Service, which will lead to an expansion of the tax net and increased revenue for the federal government.
MATAN is the biggest player in Nigeria’s market space and has a membership base of over 40 million traders across the 774 local governments, and 36 States plus the Federal Capital Territory.
Speaking during the Stakeholder Engagement, the FIRS Executive Chairman, Muhammad Nami, said, the initiative was the first of its kind, adding that it was crucial to revenue generation and will help eliminate multiple taxation, especially in the informal sector.
Nami, who is also the Chairman of the Joint Tax Board (JTB) further stated that the government is concerned about the multiplicity of taxes saying and that FIRS and JTB were working on various modalities to address the challenge.
The FIRS Boss added and that the 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 informed 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.”
He further informed 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 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 emphasises that, to ensure transparency and accountability of the project operations, a combined monitoring and evaluation team comprising both organisations would be formed.
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.
