The Federal Inland Revenue Service has disclosed plans to collaborate with security agencies, especially the Nigeria Police, to deal with illegal tax collection by touts in markets.
FIRS chairman Mr. Muhammad Nami made the remarks yesterday when the service signed a new pact with Market Traders Association of Nigeria (MATAN) to ensure effective collection and remittance of Value Added Tax (VAT) in Lagos. The move is targeted at mobilisation of tax revenue from the informal sector.
“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 stated.
The market association 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 partnership were disclosed yesterday at a stakeholders’ engagement programme on the VAT DIRECT initiative on the FIRS, held in Lagos State, a statement by the tax watchdog said. The statement said the partnership will see the FIRS collaborating with the association to deploy technology to enumerate traders for collecting and remitting VAT.
The VAT DIRECT initiative is a programme designed to foster collaboration between the FIRS and the marketplace, especially the informal sector, in the collection and remittance of the VAT using technology.
Speaking during the stakeholder engagement, Nami said the initiative was crucial to revenue generation and also to eliminating multiple taxation, especially from the informal sector.
Mr Nami said the government is worried about the multiplicity of taxes, and that the service and Joint Tax Board were working on various modalities to address the challenge, a possibility he said the new partnership has laid a good foundation for.
He said the success of this collaboration would lead to increased revenue for the country, and in turn provide the government the needed resources to fund infrastructure and other social amenities.
“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,” Mr. Nami stated.
He also noted that to ensure transparency and accountability of the project operations, a combined monitoring and evaluation team comprising both organisations would be formed.
The FIRS chairman 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.
