The federal government has officially rolled out the VAT Direct initiative to expand the tax net with the inclusion of the vast informal sector.
The initiative which was announced months ago involves a collaboration between the Federal Inland Revenue Service, the Joint Tax Board and the Market Traders Association of Nigeria.
During the roll out in Abuja, the director VAT, FIRS, Lovette Onanuga represented by Assistant Director Adebayo Adefeegbe, noted that the initiative would come with benefits for the traders as they would also enjoy ease of process in tax payments. The representative from the Joint Tax board also drew attention to the possibilities of increased revenue generation through the initiative.
He said collecting VAT from over 40 million traders would enable the government to provide basic amenities in marketplaces across the country.
However, the FIRS is partnering with the Market Traders Association of Nigeria (MATAN), the umbrella body for all trading associations in Nigeria, to collect and remit Value Added Tax (VAT) from traders in the marketplace, using the IMRMS platform.
The collaboration is known as the VAT Direct Initiative (VDI), which is part of a push to widen the government’s tax base.
MATAN is the largest player in Nigeria’s market space with a membership of well over 40 million traders across the country.
Under the arrangement, MATAN is expected to digitally enumerate its members, give them a digital identity, and track their turnover so that VAT accrued is collected and remitted to the FIRS.
Through this initiative, the FIRS will help tackle multiple taxations in the marketplace through partnership with security agencies to curb the activities of touts, miscreants, and self-imposed tax collectors involved in illegal tax collection in Nigeria’s market spaces.
Moses Ige, MATAN National Coordinator of Incentives, urged market leaders who were present at the event, to sensitise members of various market associations to ensure that they are captured for the VAT Direct Initiative (VDI).
He listed the benefits of VAT Direct Initiative for registered traders to include health insurance, micro pension, general insurance cover, low-interest and non-collaterised business loans and grants, provision of provision of social amenities in marketplaces and free legal services.
Ige said, “All the services, including health insurance scheme, enjoyed by those in the public sector will also be extended to those in the informal sector. Registered MATAN members will have access to free medical care.
“Registered traders will also enjoy insurance cover in case of any loss as a result of disasters, have access to loans, and enjoy micro-pension scheme. We are working with the National Pension Commission (PENCOM) to get our members registered for the contributory pension scheme.
“With the VAT Direct Initiative, the government will get more revenue to execute capital projects in markets across the country.
“We are also partnering with Bank of Industry (BOI) to ensure that every small business owners have access to loans.”
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