Business

FIRS-MATAN VAT Direct Initiative: Market merchants will have VAT immunities

Published

on

Mr. Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PwC said, market vendors participating in the FIRS-MATAN VAT Direct Initiative will receive exemptions if their company has a turnover of less than N25 million. 

He revealed this on Tuesday while speaking about the new Value Added Taxes initiative between the FIRS and the Market Traders Association of Nigeria (MATAN) in an interview.

He also revealed that doing so would make it possible for the state and federal governments to gather the necessary data and information about the unorganised sector. He said that although the law is not brand-new, the execution of the new partnership is what counts. He proceeded by saying: 

“I am not skeptical about the timing. It’s important to clarify that this is not a new tax; no law introduced a new tax on traders; it has always existed and how to apply it.It is also instructive to note that this was a voluntary agreement between FIRS and MATAN (the traders association), meaning they chose to participate.

Regarding exemptions, he added that in specifics, it has VAT exemptions for traders with business turnovers of less than N25 million annually, adding that “MSMEs and traders are more than 90% of businesses in the micro space, so they won’t have to charge VAT, and there are also exemptions for basic food items, for example, for businesses that sell food that isn’t processed or packaged.”

A trader selling rice, beans, and notebooks for elementary school would not be required to charge VAT, for instance. The FIRS agreed to it, in part, because the traders pay a variety of taxes to extortorous officials in the unorganized sector.

He disclosed that the FIRS is using its power to prevent non-state actors from collecting taxes, extorting money, and paying VAT where it is due. 

The informal sector will eventually become more formally integrated into the economic system, which is good for traders because they will pay less. It can also provide federal and state governments with economic data for planning.

Trending

Exit mobile version