Tuesday, July 4, 2023

Informal traders targeted in Nigeria to boost tax

Nigeria's federal revenue agency said on Monday it had partnered with a traders association to collect value added tax (VAT) from millions of informal traders, part of a push to widen the tax base by President Bola Tinubu's government.

Africa's largest economy has embarked on its boldest reform agenda in decades, including the removal of a popular petrol subsidy and restrictions on foreign exchange trading, a gamble by Tinubu to try boost sluggish growth.

Nigeria has one of the lowest tax collection rates in the world at around 10.8% of GDP, according to the Federal Inland Revenue Service (FIRS). Only 47% of this year's budget will come from revenues and the rest from borrowing.

The FIRS said in a statement that it was partnering with the Market Traders Association of Nigeria (MATAN) to collect and remit VAT from its members, especially those in the informal sector, using a digital platform.

It said the partnership would help "curb the activities of touts, miscreants and self-imposed tax collectors involved in illegal tax collection in Nigeria's market spaces."

MATAN says it has more than 40 million traders, mostly in the informal sector where a majority of Nigerians earn a living.

The revenue agency said MATAN members will receive identity cards with tax identification numbers and a digital platform would track their turnover for tax purposes.

By MacDonald Dzirutwe, Reuters

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