Informal Economic Sector: FIRS, Market Traders Association Partner For VAT Remittance

Executive Chairman, FIRS, Muhammad Nami, unveils the Market Traders Association of Nigeria (MATAN) VAT/Tax identity card at the stakeholder engagement meeting in Lagos on 21June 2023.
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The Federal Inland Revenue Service (FIRS) has partnered with the Market Traders Association of Nigeria (MATAN) to collect and remit Value Added Tax (VAT) to the FIRS from the country’s markets in the informal sector. 

MATAN, which has a membership of well over 40 million traders across the country’s 774 local governments, and 36 States plus the Federal Capital Territory, is the biggest player in Nigeria’s market space.

The details of the FIRS’ partnership with MATAN was disclosed at a Stakeholders Engagement Programme on the VAT DIRECT Initiative, held in Lagos State. 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 base and increased revenue for the Federation.

The VAT DIRECT Initiative (VDI) is a programme 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. 

Executive Chairman, FIRS, Muhammad Nami, alongside Secretary of the Joint Tax Board, Obomegie Nana-Aisha; Director, VAT, FIRS, Dr Lovette Ononuga; MATAN, BOT Chairman, Comr. Muhammad Labaran… in a group photo with MATAN vendors under the VAT Direct Initiative at the stakeholder meeting between the FIRS and Market Traders Association of Nigeria (MATAN) in Lagos on 21 June 2023.

Speaking during the Stakeholder Engagement, Executive Chairman, FIRS, Mr. Muhammad Nami, disclosed 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.

 Nami, who is also the Chairman of the Joint Tax Board (JTB), further stated that the government was worried about the multiplicity of taxes, and that the Service and JTB were working on various modalities of addressing this challenge/ He added that the new partnership had laid a 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 noted that the Service would collaborate with security agencies, especially the Nigeria Police, to deal with illegal tax collection by touts in markets. 

 Nami 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.” 

Mr. Nami speaking at the event

Nami stressed 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. 

 His words: “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.”

 Nami stated also disclosed that to ensure transparency and accountability of the project operations, a combined monitoring and evaluation team comprising both organisations would be formed. 

During the Stakeholder Engagement, the FIRS chief 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, Iyaloja (female market leaders) of markets across the country, members of various trade clusters, representatives from all major markets across the country, as well as FIRS officers, according to a statement made available to The Dream Daily Newspaper on Thursday, 22 June, 2023 in Abuja by Special Assistant to the Executive Chairman, FIRS, Media and Communication, Johannes Oluwatobi Wojuola.


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