The VAT initiative to bring informal sector traders into the tax net is commendable, but safeguards are needed to prevent abuse. Proper education is necessary to protect traders from exploitation by tax officers. The initiative exempts businesses with annual turnovers of N25m or less, and basic items are also exempted. Traders who do charge VAT can claim input VAT on their purchases. The impact on traders should be minimal, and the government’s biggest benefit is tax awareness and data for economic planning. Trust, fiscal exchange, and corruption issues must be addressed for the initiative to succeed. Cooperation with states is also crucial for income tax compliance.
Source: ntm.ng
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