- FIRS to Tax Roadside Sellers, Traders
Federal Government is currently contemplating taxing roadside traders and sellers in the informal sector to promote accountability and good governance.
Mohammed Nami, the Executive Chairman of the Federal Inland Revenue Service (FIRS), made the statement during the ninth Country Correspondents meeting and African Tax Administration Forum (ATAF’s) meeting on taxation in Abuja.
He said: “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,” Nami said.
According to him, at a period when the government is trying to up revenue generation, informal sector also known as underground should be brought to the table. He, however, said because of the complexity of the situation, politicians are wary of imposing it as they’ve all promised to protect voters from taxes during campaign.
Nami said, “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 explained that this informal sector “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.”