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BREAKING: FG Announces Plans to Collect VAT from Market Traders, Informal Sector


The Federal Government, through the Federal Inland Revenue Service (FIRS), has announced plans to collect Value Added Taxes from the informal sector through the VAT Direct Initiative.

FIRS announced its collaboration with the Market Traders Association of Nigeria (MATAN) to collect and remit VAT from their members, particularly those operating in the informal sector, in a statement released on Monday.

This partnership, it said, will utilise unified systems technology to simplify VAT payment and remittance.

The FIRS, the agency responsible for VAT collection in Nigeria, emphasised the significance of collaborating with MATAN to enhance VAT collection from members in the informal sector.

“This collaboration is known as VAT Direct Initiative, a collaboration between FIRS and MATAN where MATAN promotes awareness on VAT collection and remittance in the marketplace and informal sector while also simplifying VAT payment and remittance for the marketplace and informal sector using a purpose-built digital platform,” the statement said.

According to the statement, the VAT Direct Initiative will leverage technology to promote awareness of VAT collection and remittance among market traders and the informal sector. It will also streamline VAT payment and remittance processes through a purpose-built digital platform.

The FIRS expressed its belief that this collaboration will not only increase VAT revenue for the government but also contribute to the development of infrastructure and social amenities by providing more funds to the three tiers of government.

Under this initiative, MATAN members will receive an ID card containing their Tax Identification Number and personal details upon enumeration. This digital platform will enable tracking of their turnover to ensure proper VAT collection and remittance to the FIRS.

Part of the statement reads: “The Initiative is the first of its kind that will utilise technology to foster collaboration between the FIRS and the marketplace for the collection and remittance of VAT

“This will also boost VAR revenue generation for the three tiers of government, which in turn means more money to fund infrastructure and social amenities.”

It is worth noting that Nigeria’s VAT collection reached N709.59 billion in the first quarter of 2023, representing a 1.75% increase on a quarter-on-quarter basis. The manufacturing sector accounted for the largest share of VAT collection at 29.65%, followed by the information and communication sector at 19.29% and the mining and quarrying sector at 12.24%.

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Segun Akinlabi

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