The Federal Inland Revenue Service (FIRS) is the agency of the Federal Government of Nigeria responsible for assessing, collecting and accounting for tax and other revenues accruable to the Federal Government and the Federation. The FIRS is responsible for the administration of Value Added Tax in Nigeria. MATAN means Market Traders Association of Nigeria. It is the umbrella body for all trading associations in Nigeria and was founded in the year 1995. MATAN is the largest player in Nigeria’s market space with a membership of well over 40 million traders across the country. The FIRS is partnering with MATAN to collect and remit Value Added Tax (VAT) from their members—especially those in the informal sector—using a unified systems technology. This collaboration is known as the VAT Direct Initiative. What is the VAT Direct Initiative (VDI)? It is a collaboration between the FIRS and MATAN where MATAN promotes awareness on VAT collection and remittance in the marketplace and informal sector. It also simplifies VAT payment and remittance for the marketplace and informal sector using a purpose-built digital platform. MATAN has a digital platform that enumerates its members, giving them a digital ID and tracks their turnover so that VAT accrued is collected and remitted to the FIRS. The VAT Direct Initiative (VDI) is the first of its kind program that will utilize technology to foster collaboration between FIRS and the marketplace for the collection and remittance of VAT. Through this initiative, the FIRS will help tackle multiple taxation 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. The VAT Direct Initiative (VDI) will boost VAT revenue generation for the three tiers of government, which in turn means more money to fund infrastructure, provide social amenities and cater for the welfare of citizens. MATAN members will each receive an Identity Card upon enumeration. This card contains their Tax Identification Number (TIN) and other personal details for tax purposes. The VAT Direct Initiative (VDI) will have a monitoring and evaluation team comprising FIRS officers and MATAN members to ensure transparency, accountability, prompt VAT remittance, sustained commitment and reporting which are vital to build public confidence in the initiative. What Businesses Are Exempt from the VAT Direct Initiative? Any business with an annual turnover that falls below N25 million is exempt from registering or charging Value Added Tax (VAT) but may opt into the VDI to enjoy the benefits. Traders in VAT-Exempt Goods including medical and pharmaceutical products, basic food items, educational books and materials, baby products, fertilisers, locally produced animal feeds, locally produced sanitary towels, pads or tampons as well as agricultural seeds and seedlings are not expected to charge nor remit VAT under the VAT Direct Initiative but may choose to opt into the initiative to enjoy its benefits. VAT-Exempt Services such as medical services; services rendered by Micro-Finance Banks and Mortgage Institutions; Plays and Performances conducted by educational institutions as part of learning; tuition relating to nursery, primary, secondary and tertiary education; hiring or rental of tractors, ploughs and other agricultural equipment for agricultural purposes; as well as shared passengers and road transport services are not under the VAT Direct Initiative but may choose to opt into the VDI to enjoy the benefits. 4 Major Benefits of The FIRS Partnership With Market Traders Association of Nigeria (MATAN) It will eliminate multiple taxation in the marketplace: By improving security in our markets, and tackling the activities of touts, miscreants and self-imposed tax collectors, this partnership will go a long way in bringing an end to multiple taxation in markets. It will generate more revenue for the three tiers of government: This partnership will lead to more VAT revenue generated, which in turn means more money available to the Federal, State and Local Governments to provide infrastructure, social amenities, and cater to the welfare of citizens. It will lead to an expansion of the country’s tax net: VAT Direct Initiative will see the service making an unprecedented entry into the informal sector, and consequently bring traders who hitherto were not registered for tax into the tax net, and paying their taxes. It will bring traders into endless possibilities and opportunities through meaningful partnerships as well as enhance the economy and bolster traders’ confidence in government-private sector relationships. WATCH: VAT Direct Initiative: Highlights from the FIRS’ Stakeholder Engagement With MATAN Members: Mr. Muhammad Nami, Executive Chairman FIRS’ Remarks at FIRS launch of VAT Direct Initiative in Partnership with MATAN: VAT Direct Initiative: Amb. Felix Johnson Osakwe highlights benefits of the VAT Direct Initiative: VAT Direct Initiative: Dr. Lovette Onanuga, Director VAT, speaks on the FIRS Partnership with MATAN: VAT Direct Initiative: Mr. Ayo Abiola, MD Burke-Frazier speaks about the FIRS partnership with MATAN: VAT Direct Initiative: Aisha Obomegie, Secretary, Joint Tax Board, speaks on expanding the tax net: VAT Direct Initiative: Key things to know about FIRS-MATAN partnership
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