VAT Direct: FIRS clarifies new tax policy, says initiative not for traders below N25m turnover

The Director of Value Added Tax (VAT) at the Federal Inland Revenue Service (FIRS), Lovette Ononuga, has clarified that its VAT Direct Initiative would exempt traders in the informal sector with a turnover below N25 million.

Ononuga disclosed this on Thursday in a Channel Television interview monitored by Business Hallmark.

FIRS, in partnership with the Market Traders Association of Nigeria, recently launched the VDI in a bold move to widen the Nigeria’s revenue net.

There were mixed reactions immediately after the announcement, with some Nigerians claiming that the initiative would affect petty traders who are already battling the effect of fuel subsidy removal.

However, Ononuga clarified that the tax would not affect pretty traders like tomato or pepper traders.

According to him, the VDI is meant to capture electronic, textile, gold and other similar traders with turnovers from N25 million and above.

“We are not doing it aside from the VAT Act; the Act stipulates who should pay VAT, what is VATable and what is not. The average trader whose turnover is below N25 million is not affected by the VDI. Also, those who trade in the VAT exempted goods are not expected to pay taxes with this initiative.

“The informal sector we are talking about are those with huge turnovers who should be paying VAT but are not doing so, people that sell things like electronics, textiles, gold and all that, not people selling tomatoes, pepper in the marketplace. We are not targeting ordinary traders selling foodstuff in the market”, she explained.