Collaborative Efforts by Traders and FIRS Aim to Curb Multiple Taxation in Informal Sector VAT Collection

"Market Traders Association of Nigeria Collaborates with FIRS on Innovative 'VAT Direct Initiative' to Streamline Tax Collection from Informal Sector"

MATAN and FIRS Join Forces for VAT Direct Initiative

The Market Traders Association of Nigeria (MATAN) and the Federal Inland Revenue Service (FIRS) have recently announced their collaboration on a new scheme called the ‘VAT Direct Initiative.’ This initiative aims to streamline the collection of Value Added Tax (VAT) from the informal sector, reducing multiple taxation and promoting VAT awareness.

Under the VAT Direct Initiative, MATAN members will be issued with an ID card that includes their Tax Identification Number (TIN). This ID card will enable the tracking of VAT accrued from their businesses, facilitating its collection and remittance to FIRS. The implementation of this initiative is expected to significantly increase VAT revenue generation for all tiers of government, providing much-needed funds for infrastructure development and the improvement of social amenities.

The VAT Direct Initiative has received widespread praise from various stakeholders, including the Importers Association of Nigeria (IMAN) and the Joint Tax Board. These organizations recognize the potential of the initiative to simplify tax payment processes and enhance record-keeping in the informal sector.

According to a report from, the VAT Direct Initiative is a strategic move to address the challenges faced by the informal sector in complying with tax regulations. The informal sector, which constitutes a significant portion of Nigeria’s economy, has traditionally struggled with tax compliance due to various factors such as limited access to formal financial services and a lack of awareness about tax obligations.

By providing MATAN members with an ID card that includes their TIN, the VAT Direct Initiative aims to bridge this gap and ensure that VAT is collected efficiently and accurately. This will not only benefit the government in terms of increased revenue but also enable the informal sector to contribute more effectively to the overall economy.

The collaboration between MATAN and FIRS reflects a proactive approach to addressing the unique challenges faced by the informal sector. By working together, these organizations can leverage their respective expertise and resources to create a more conducive environment for tax compliance and economic growth.

One of the key advantages of the VAT Direct Initiative is its potential to reduce multiple taxation within the informal economy. Multiple taxation has long been a concern for businesses operating in the informal sector, as it creates unnecessary financial burdens and hampers their ability to grow and thrive. By streamlining the VAT collection process, the initiative aims to alleviate this burden and create a more favorable business environment for market traders.

Additionally, the initiative seeks to promote VAT awareness among market traders. Many traders in the informal sector may not fully understand their tax obligations or the benefits of VAT compliance. Through targeted education and outreach programs, the VAT Direct Initiative aims to enhance the understanding of VAT and its importance in supporting government programs and public services.

The implementation of the VAT Direct Initiative is expected to have far-reaching benefits for both the government and market traders. The increased revenue generated from VAT collection will enable the government to invest in critical infrastructure projects, improve social amenities, and provide essential services to the public. At the same time, market traders will benefit from a simplified tax payment process and improved record-keeping, which will enhance their business operations and contribute to their long-term success.

In conclusion, the partnership between MATAN and FIRS through the VAT Direct Initiative represents a significant step forward in promoting tax compliance and economic growth in Nigeria’s informal sector. By streamlining the collection of VAT and reducing multiple taxation, this initiative will not only benefit market traders but also contribute to the overall development of the country. With the support of key stakeholders and effective implementation, the VAT Direct Initiative has the potential to transform the informal sector and create a more inclusive and prosperous economy for all.

Barry Caldwell

Barry Caldwell

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