Lovette Ononuga, the director of Value Added Tax at the Federal Inland Revenue Service, stated that the VAT Direct Initiative will exempt informal entrepreneurs with a turnover of less than N25 million.
Remember that the FIRS just introduced the VDI in collaboration with the Market Traders Association of Nigeria in order to broaden the Nation’s income net.
Following the announcement, there were conflicting reactions, with some Nigerians claiming that the move will harm minor shopkeepers, who are already suffering as a result of the loss of fuel subsidies.
However, Ononuga underlined that the levy would not impact attractive dealers such as tomato or pepper sellers.
The VDI, he claims, is intended to capture electronic, textile, gold, and other comparable merchants with turnovers of N25 million and above.
“We are not doing it in addition to the VAT Act; the Act specifies who must pay VAT, what is VATable, and what is not.” The VDI has no effect on the average trader with a turnover of less than N25 million. Furthermore, those that deal in VAT-exempted goods are not required to pay taxes under this scheme.
“The informal sector we’re talking about is people with large turnovers who should be paying VAT but aren’t, people who sell things like electronics, textiles, gold, and so on, not people selling tomatoes and pepper in the marketplace.” “We are not targeting ordinary market vendors selling food,” she explained.