The government of President Bola Ahmed Tinubu has revealed its new initiative, known as the Value Added Tax Direct Initiative, aimed at enabling the Federal Government to collect taxes from the informal sector.
Announcing the initiative, the Federal Inland Revenue Service (FIRS) stated through its official Twitter handle on Monday that it would partner with the Market Traders Association of Nigeria (MATAN) to facilitate the collection and remittance of VAT from their members, particularly those operating in the informal sector.
The partnership between FIRS and MATAN seeks to promote awareness regarding VAT collection and remittance in the marketplace and informal sector. Furthermore, it aims to streamline VAT payment and remittance processes for these sectors through the creation of a purpose-built digital platform.
By implementing this collaborative effort, the government expects to boost revenue generation through VAT for all three tiers of government, allowing for increased funding for infrastructure development and the provision of essential social amenities.
The National Bureau of Statistics’ latest report reveals that Nigeria collected a total of N1.18 trillion as VAT and company income tax during the first quarter of 2023.
In light of the nation’s escalating debt burden, currently estimated at around N49.85 trillion, the Debt Management Office recently stressed the importance of expanding Nigeria’s tax net in order to sustain the country’s financial obligations.
