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Nigeria targets millions of informal traders to boost tax

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NIGERIA’S federal revenue agency said it had partnered with a traders association to collect value-added tax (VAT) from millions of informal traders, part of a push to widen the tax base by President Bola Tinubu’s government.

Africa’s largest economy has embarked on its boldest reform agenda in decades, including removing a popular petrol subsidy and restrictions on foreign exchange trading, a gamble by Tinubu to try to boost sluggish growth.

Nigeria has one of the lowest tax collection rates in the world at around 10.8% of GDP, according to the Federal Inland Revenue Service (FIRS). Only 47% of this year’s budget will come from revenues and the rest from borrowing.

The FIRS said in a statement that it was partnering with the Market Traders Association of Nigeria (MATAN) to collect and remit VAT from its members, especially those in the informal sector, using a digital platform.

It said the partnership would help “curb the activities of touts, miscreants and self-imposed tax collectors involved in illegal tax collection in Nigeria’s market spaces.”

MATAN says it has more than 40 million traders, mainly in the informal sector where a majority of Nigerians earn a living.

The revenue agency said MATAN members would receive identity cards with tax identification numbers and a digital platform would track their turnover for tax purposes.

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By The African Mirror