Some financial experts have urged the Federal Government to embark on sustained enlightenment campaign to educate the informal sector on the proposed Value Added Tax (VAT) to check distrust.
They said this in separate interviews with the News Agency of Nigeria (NAN) on Tuesday, July 18, 2023 in Lagos.
A former Director, National Association of Small and Medium Enterprises, Mr Nerus Ekezie, said the government should have an intervention for the Small and Medium Enterprises (SMEs) sector and educate them on the VAT policy.
“The government should formalise many of the small businesses and allocate its intervention through the various stakeholders.
“The authorities need to educate them on the new VAT laws so as not to worsen their challenges because many businesses are grappling with low customers apathy,” Ekezie said.
He noted that the Federal Government could reduce the acrimony associated with the proposed VAT policy by enhancing the country’s business climate.
“The government needs to provide more critical infrastructure that will spur business growth and reduce overhead cost,” Ekezie said.
Also, the Founder, Independent Shareholders Association of Nigeria, Mr Sunny Nwosu, said the proposed VAT policy would witness distrust among traders due to inadequate enlightenment campaign.
Nwosu added that most businesses was often averse to such Federal Government policy because they are yet to benefit from any of their interventions.
“The government should begin to have adequate budgetary allocation tailored for the SMEs as they are the engine of growth in our society.
“Then overtime the government could introduce VAT for them to pay and reward them with some incentives,” Nwosu said.
He said that the government should be prudent with public funds so as to engender them to the people. Nwosu siad the introduction of VAT on the informal sector was imperative to boost the nation’s tax earnings. He noted that the tax earnings was not commensurate to the nation’s economic size.
“Our country’s tax to the Gross Domestic Product is one of the lowest in the continent despite our potential.
“We must support this VAT policy so as to boost our revenue and address infrastructural challenges affecting development,” he added.
NAN reports that the Federal Inland Revenue Service has announced its plan to collect and remit VAT from traders, especially those in the informal sector. This will be achieved in partnership with the Market Traders Association of Nigeria (MATAN) using a unified systems technology.
According to Muhammad Nami, the FIRS Chairman, combined monitoring and evaluation team, comprising FIRS officers and MATAN members will be formed immediately. This, he said, would enable an adequate cover of all the essential areas of project operations, and ensure transparency and accountability.