Nigerians engaged in wholesale and retail trade and repair of motor vehicles and motorcycles paid a total tax of N167.45bn between the first quarter of 2022 and Q1 2023, according to findings
The total tax was raised from Value Added Tax and Company Income Tax.
According to the Federal Inland Revenue Service, CIT is a 30 per cent tax imposed on the profit of companies and VAT is a 7.5 per cent consumption tax paid when goods are purchased, and services rendered and borne by the final consumer.
The government raised N96.96bn from VAT and N70.49bn from CIT for the wholesale and retail trade and repair of motor vehicles and motorcycles.
A breakdown for VAT showed that mechanics and traders paid N14.32bn in Q1, 2022, N16.21bn in Q2, 2022, N17.31bn in Q3, 2022, N19.99bn in Q4, 2022, and N29.14bn in Q1, 2023.
The breakdown showed that there was an increase in VAT collected by N14.82bn or 103.49 per cent between Q1, 2022 and Q1, 2023.
A breakdown for CIT showed that mechanics and traders paid N8.3bn in Q1, 2022, N19.81bn in Q2, 2022, N14.46bn in Q3 2022, N17.89bn in Q4, 2022, and N10.43bn in Q1, 2023.
The breakdown showed that there was an increase in CIT collected by N2.13bn or 25.66 per cent between Q1 2022 and Q1 2023.
September last year, the Market Traders Association decried what it described as multiple taxations by the relevant government agencies.
It added that if it remains unchecked, it will result in a geometric increase in the prices of goods and wares at various markets in the country.
The Federal Inland Revenue Service recently partnered with the Market Traders Association of Nigeria to collect and remit VAT to the FIRS from the country’s markets, especially in the informal sector.
The FIRS’ partnership with MATAN was disclosed at a Stakeholders Engagement Programme on the VAT DIRECT Initiative, held in Lagos State. The partnership will see the FIRS collaborating with the association to deploy technology to enumerate traders for collecting and remitting VAT to the Service, consequently leading to an expansion of the tax net and increased revenue for the Federation.
During the Stakeholder Engagement, the Executive Chairman of the FIRS, Mr Muhammad Nami, said that the initiative was crucial to revenue generation as it eliminates multiple taxation, especially from the informal sector.
Reacting, the National President of Motormechs and Technicians Association of Nigeria, Dr Oseni Suleiman told The PUNCH that mechanics are faced with the issue of multiple taxation from local and state governments.
He said, “The issue of multiple taxation is a problem with local government and state government. The federal government doesn’t have too much taxation on mechanics. The local government will charge an open space permit, that permit, and this permit. After the local government collection, the state government also collects. And we will not get any benefit directly from them that justifies the collection.”
