Nigeria Aims to Broaden Tax Base by Including Market Traders in VAT Payments
In a move to expand the country’s tax base, the Nigerian authorities have announced plans to target millions of market traders and informal business owners for Value Added Tax (VAT) payments. According to Nigeria’s federal tax agency and the Market Traders Association (Matan), approximately 40 million individuals fall within this category.
Under the proposed scheme, market traders will receive a digital ID accompanied by a unique tax identification number, commonly known as a “TIN.” This TIN will enable tracking of their turnover and remittances to Nigeria’s federal revenue service.
Currently, taxes contribute just over 10% of Nigeria’s government revenue, which is one of the lowest proportions globally. The majority of revenue is derived from crude oil sales.
In the past month, Africa’s largest economy has embarked on a series of economic and fiscal reforms. President Bola Tinubu’s new administration aims to navigate the country out of its ongoing economic crisis, marked by high inflation, a rising cost of living, and declining government revenues. These reforms are viewed as crucial steps toward revitalizing Nigeria’s economy.
