Street traders, artisans, others should pay tax – Nami

Mohammed Nami, the Executive Chairman of the Federal Inland Revenue Service (FIRS), has said that tax administrators need to tax street traders, artisans and other jobs in the informal sector of the economy but politicians are frustrating the effort.

The FIRS boss argued that taxing the informal sector promotes good governance and political accountability, ensuring the informal sector has the right to request for certain services as demanded by the formal sector, which is being taxed.

“Taxing the informal sector may also be a way of promoting good governance and political accountability of the State because tax strengthens the social contract between the citizens and the government. Thus, informal businesses that contribute to tax revenues are likely to assert their rights to receive certain services from government thereby ensuring accountability,” he said.

He explained that politicians are against extending taxation to the players in the informal sector fear of losing votes.

“Taxing the informal sector is viewed as politically unpopular and politicians are unwilling to risk losing the high number of votes represented in the sector. This is because politicians promise informal workers protection from taxation in exchange for their votes,” he said.

“Also operate on a cash basis and maintain poor or no accounting records. Most of the businesses in the sector are also small and fragmented making it inefficient for the revenue administrations to enforce compliance.”