FIRS launches digital initiative to include informal sector in Nigeria’s tax net

The Federal Inland Revenue Service (FIRS) on Thursday, officially initiated the implementation of the Integrated Market Revenue Management System (IMRMS) to bring the informal sector, specifically market traders, into the federal government’s tax framework.

To kick start the process, the traders’ enumeration commenced in Abuja on Thursday, December 21.

This purpose-built digital platform aims to capture and formalize the tax contributions of market traders across Nigeria.

In collaboration with the Market Traders Association of Nigeria (MATAN), which represents over 40 million traders nationwide, FIRS has introduced the VAT Direct Initiative (VDI).

The partnership seeks to collect and remit Value Added Tax (VAT) from traders in the marketplace through the IMRMS platform.

The VDI involves:
The digital enumeration of MATAN members.
Granting them digital identities.
Monitoring their turnover to facilitate the collection and remittance of VAT to FIRS.
The move aligns with the government’s strategy to expand the tax base, ensuring more comprehensive revenue collection.

One of the key objectives is to address issues of multiple taxation in marketplaces.

Speaking to journalists on the sidelines of the event, Ambassador Olakunle Johnson Moses, chairman of the steering project committee on VAT Direct Initiative, said:

”The importance of this drive is that the informal sector is going to experience good governance and changes because they have been suffering from multiple taxation and extortion by touts in the marketplaces and the roadside.

”What this programme will do for them is that they are going to be enumerated; through this enumeration, they are going to have a multi-purpose ID card; through this ID card, their benefits are going to be tied to the multi-purpose ID card.

”These benefits include free legal services, non-interest loans, insurance, and everything else that this country has denied them before.

”But, with this initiative, all their rights will come to reality. And again, this initiative will boost the internally generated revenue of the three tiers of government.”

On his part, Mr Adebayo Adefeogbe, acting director of VAT FIRS, emphasized that the initiative would provide coordinated access to almost 70% of untaxed revenue in the informal sector.

Moses Ige, MATAN’s National Coordinator of Incentives, called upon market leaders to sensitize their association members, ensuring their participation in the VAT Direct Initiative (VDI).

He said: ”Those in the public service constitute about 20% of the adult population; they enjoy free health insurance cover, they enjoy pension and other incentives because they are public services, but now the remaining 80% will be enjoying all these services through MATAN.

”That makes VDI a landmark achievement for this government. We might not see it now until the implementation becomes a reality. All of us are going to enjoy and smile at the end of the day.

”Not only are we talking about taxation, which will bring more money to provide infrastructure, other services, and the dividends of democracy, but we are also talking about giving directly – the government giving back to the people.”