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Tag: VAIDS

  • Amnesty coming for owners of undeclared foreign assets, ministers assure

    NIGERIANS with assets and investments overseas who failed to declare such in a bid to evade paying taxes have been promised amnesty by the Federal Government.

    Ministers for Justice and Attorney-General of the Federation Abubakar Malami and his Finance counterpart, Mrs. Zainab Ahmed, gave the hint in Abuja yesterday while unveiling the “Voluntary Offshore Assets Regularisation Scheme (VOARS).”

    Malami explained that, just like the Voluntary Assets and Income Declaration Scheme (VAIDS), the rationale for the VOARS is to provide an opportunity for taxpayers or amnesty for tax defaulters to voluntarily declare their offshore assets and income from sources outside Nigeria relating to the preceding 30 years of assessment.

    The AGF said that anyone, who voluntarily declare his/her offshore assets will be entitled to “permanent waiver of criminal prosecution for tax offences and offences related to the offshore assets, penalties and interests concerning such declared offshore assets.

    He added that such Nigerian will enjoy “immunity from tax audit of the declared and regularised offshore assets; waiver of interest and penalties on the declared and regularized offshore assets.”

    Malami added that those who voluntarily declare will “receive from Federal Government of Nigeria an Offshore Assets Regularisation Compliance Certificate on the declared and regularised offshore assets.

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    “Be free to use or invest their duly regularised residual offshore assets in any manner in Nigeria or overseas and be subject only to annual tax to Federal Government of Nigeria on the income earned on such residual offshore assets.”

    The AGF expressed optimism that President Muhammadu Buhari will grant an extension since, the scheme, meant to last a year, beginning from October last year was just being unveiled.

    Malami said the legal basis for VOARS exists in the Executive Order 8 (EO8) signed by President Muhammadu Buhari on October 8, 2018.

    He said the EO8 also provides the legal basis for a group, the Swiss Consortium to approach third-party holders of offshore funds, with a view to accessing information on the owners.

    The minister said the third party intended in the scheme include: banks, estate managers, auditors and accountants.

    Mrs. Ahmed said the introduction of VOARS aims to serve as an additional opportunity and mechanism for Nigerian citizens to continue to fulfil their tax obligations by extending the scope to offshore assets and foreign-sourced income.

    She said the EO8 provides a platform for taxpayers, who have defaulted in the payment of their taxes, to voluntarily declare all offshore assets and foreign-sourced income relating to the preceding 30 years of assessment.

    Mrs. Ahmed explained that the VOARS provides a one-year window, commencing from the October 8, 2018 for affected taxpayers to declare all offshore assets and foreign-sourced income without the threat of criminal prosecution for tax offences related to undeclared offshore assets.

    She added: “Through this scheme, it is our aim that the culture of accountability and I honesty in citizens to fully declare any income and assets owned will begin to grow and will encourage more citizens to readily come forward to declare without any threat of interrogation and/or prosecution.”

  • After VAIDS comes Sanctions:

    The Voluntary Assets and Income Declaration Scheme (VAID) will officially be wrapped up this weekend. Assistant Editor, Nduka Chiejina reports on the journey of the Scheme, the sanctions and government’s appeal to tax payers to take advantage of the amnesty window before the big stick wielded.

    Upon expiration of VAIDS at the end of this month, government will drag those who have evaded taxes and yet failed to take advantage of the scheme to court on charges bordering on economic crimes.

    Tax evasion is a crime punishable upon conviction by imprisonment of up to 5 years, while the taxpayer is still liable to pay the tax due with interest and penalties. In most cases, defaulters are subject to a penalty of 10% of the tax due and interest at 21% per annum. In some cases, the penalty is 100% of the tax due and the defaulters’ assets are liable to be forfeited.

    Minister of Finance Mrs Kemi Adeosun warned that, “those who fail to take advantage of the scheme and are later found to have under-declared their taxes or assets will be treated as willful tax evaders and will, therefore, face the full force of the law and will not be shielded by anonymity.”

    The Minister, who decried Nigeria’s low tax revenues which, according to her, are at variance with the lifestyles of a large number of its people and with the value of assets known to be owned by Nigerians resident around the world, said there has been a systemic breakdown of compliance with the tax system with various strategies used to evade tax obligations. These include transfer of assets overseas, the use of offshore companies in tax havens to secure assets, and the registration of assets in nominee names.

    At the expiration of the initial deadline for compliance with the Voluntary Assets and Income Declaration Scheme (VAIDS), on March 31, 2018, Special Adviser on Media and Publicity to the President, Mr. Femi Adesina warned that the short extension after the original March 31 date was based on the appeals by professional bodies and individual taxpayers. He said President Buhari with this development insisted that no further extension of time would be approved after June 30.

    President Buhari had cautioned that a new date was also given based on the conviction of the Ministry of Finance that “the overall objective to increase compliance will be attained, and that additional revenue will accrue.”

    President Buhari further explained that a fresh Executive Order would be made to give legal backing to the new timeline. According to President Buhari, “for a nation of people who are competitive and driven, it is not a pride that we are the lowest performer in tax to GDP, not just in Africa, but in the world. “Nigeria’s growth needs are such that every Nigerian must do his duty to his nation, to his neighbour, and to himself.

    Buhari noted that “hiding monies overseas, evading taxes by manipulation, and other unwholesome practices, have never developed a country, and for Nigeria to attain her true potential, these must stop.” He then urged Nigerian companies and individuals to  “do the right thing by taking this window of extension to regularise.”

    He added that the right thing may not be convenient or comfortable, “but in the long run, we will all have a nation we can be proud of.” President Buhari further urged tax authorities to use the extension window to perfect plans to prosecute those who fail to regularise their tax status.

    Executive Chairman of the Joint Tax Board (JTB) and a leading figure pushing for the success of VAIDS Mr. Oseni Elama told The Nation that “from the VAIDS exercise and other similar exercises, what we are doing is to ensure that we have a reliable database. We expect that at the end of this exercise, we should have not less than 40 million Nigerians in the tax net and given the amount of assets and income we see, we expect huge revenue.”

    The Federal Inland Revenue Service (FIRS) he said is anticipating to collect N6.4 trillion in 2018 stressing that “from this exercise, we expect that 1 billion dollars which translates to about N320 billion will come at the Federal level. At the state level, the figures will be high. This is just to tell you that there are so much possibilities that are there. We believe that there are states that can generate enough to sustain themselves outside the federal government allocation. When we make available these figures from last year, you will be able to have an insight as to what we are looking at this year and the years ahead.”

    Speaking on if the tax authorities have the capacity to go after the high and mighty who have strong political connections in the country and have decided to ignore the VAIDS Amnesty, Elema stated that “the tax man is not a political agent. The tax man, by provisions of the law, has access to so many information and it’s a profession. So, the professional ethics also brings all levels of discipline on how you manage the information that is at your disposal.”

    “We are looking at previous non-compliance with the law because once you are afraid or unwilling to comply with the law, it amounts that you have evaded tax which is a criminal issue. We want to have an all-inclusive governance and allowing people take advantage of this opportunity so that we can begin to get the citizens to take ownership of the tax administration system. It doesn’t matter which government is in or out. If you check the provisions of the law, the tax man can carry out the tax investigation backward six years without the person who was there at that time. But what this scheme is doing is that previously, if you have evaded taxes, we carry out the assessment but we will not apply the sanctions that would have been applicable because you evaded tax. We remove the issue of penalties, interests and not press criminal charges against you for tax evasion. So, I think people should take advantage of it.”

    With regards to the rich and influential, Elama noted that “that is just the normal perception that they won’t pay. They are complying. The rich are the most powerful but come to think of it, we are about 180 million people in Nigeria. But today, both corporate bodies and individuals that pay taxes as contained in our record are just about 14 million. The bank verification exercise revealed that individual account holders are over 30.5 million. Having accounts which means that they are economically active and viable to have money to put in the account.”

    Also the National Identity Management Company’s (NIMC) database he said “shows that about 22 million Nigerians ought to be taxed. So, you find out that those who pay taxes are just few out of the entire working population. Today, about 62 million Nigerians are gainfully employed in one form or another but all you see only are those that are in formal sectors. So, I don’t know of any Nigerian that has been above the law and have not been brought to book. The difficulty we have always had is that we do not have a clear way of identifying who should be paying what taxes. What we are only telling the members of the public is that the tax man today knows you beyond how you know yourself. Now, we have these information but we just want you to take advantage of this window. At the end of the amnesty, we begin to serve some ‘love letters’. So those hidden assets and income you hid somewhere we will bring them out.”

    Elama noted that government has identified properties worth N2 trillion that belongs to corporate organisations that have never filed any tax and now we are in the process of getting a court order to start selling those properties if the owners do not come and pay the taxes.”

    To track defaulting tax payers the government introduced “Project Light House” which aids government to mine data concerning assets of tax defaulters. According to Elama,  “what we are now doing is to take a different approach. So, if you look at someone’s assets, automatically you are asking him, what was the income you used in buying this asset?  You take the initiative away from the tax payer because government now has the data. And when someone says he has N1 million, you can ask him ‘how did you come about this huge amount of assets’. It makes people rethink.

    Government recently disclosed that “all income, assets and other properties earned and acquired from 2010 to date must be accounted for by individuals and companies under the VAIDS scheme, but the data mining programme being implemented under the “Project LightHouse” initiative has uncovered, over 130,000 high profile individuals identified for scrutiny. Upon the expiration of the deadline on June 30, the Federal Government will go after the 130,000 high profile individuals if they fail to regularise their tax status by declaring under VAIDS.”

     

    Sanctions and Appeal:

    The Federal Inland Revenue Service (FIRS) and the Economic and Financial Crimes Commission (EFCC) have agreed to begin a massive clampdown on tax defaulters that fail to take advantage of the twelve months tax amnesty window, vowing to work together to ensure that all unpaid taxes by both individuals and companies, which are due to government, are recovered and remitted into the federation account.

    EFCC chairman, Ibrahim Madu stated that “the EFCC was ready to do more to bring tax defaulters to book. According to him, “People are in a hurry to collect taxes but are reluctant to remit them. It is very distressing. We may put a team together to ensure that whatever taxes are collected by anybody is remitted and on time.”

    After the expiration of the June 30 deadline, the Federal Government is considering establishing special tax courts to prosecute those who fail to regularise their tax status under the VAIDS programme. This is because government believes it is “aware of the slow nature of the judicial system and may be setting up special courts to fast track the adjudication of tax related offences under the VAIDS initiative.”

    In a bid to show the commitment of government to the scheme, the Minister of Finance, Mrs Kemi Adeosun, had approved the issuance of compliance certificate to taxpayers that had voluntarily declared their assets and income under the scheme.

    The issuance of the certificate the finance minister said is “part of efforts towards appreciating and motivating taxpayers who voluntarily declared their previously undisclosed assets and income. To guard against forgery, imitation and production of fakes, the certificate has been designed with embedded security features which include hologram, quick response code, visible and invisible certificate number and seal of the issuing tax authority.”

    Minister of Finance, Mrs. Kemi Adeosun, advised Nigerians to review any existing tax planning schemes, including those in offshore tax havens, in order to take advantage of the Voluntary Assets and Income Declaration Scheme (VAIDS) to regularise their tax status where necessary.

    The Minister stated that whilst the use of tax avoidance schemes was legal, tax evasion was not. She said, “the critical question to ask all Nigerian tax payers using offshore tax shelters will be whether all applicable taxes have been paid prior to the transfer of funds or assets to a tax shelter.  “If all taxes have been paid, then there will be no additional liability except tax payable on further income earned on those funds. However, if taxes had not been paid, then the use of such schemes is illegal.”

    Adeosun counselled users of such structures to seek professional advice, explaining further that the Federal Ministry of Finance was offering free training to professional advisers on the VAIDS to enable them support their clients.

    She urged users of offshore tax shelters to promptly embrace the VAIDS scheme to regularize their tax status, adding that Nigeria’s low tax revenues were at variance with the lifestyles of a large number of its people and with the value of assets known to be owned by Nigerians resident around the world.

    “VAIDS ushers in an opportunity to increase the nation’s general tax awareness and compliance. It is a time-limited opportunity for taxpayers to regularise their tax status relating to previous tax periods.

    “In exchange for fully and honestly declaring previously undisclosed assets and income, taxpayers will benefit from forgiveness of overdue interest and penalties, and with further assurance that they will not face criminal prosecution for tax offences or be subject to tax investigations,” stated Nigeria’s Finance Minister.

    Adeosun explained that with the increasing global focus on illicit financial flows and tax evasion, offshore tax shelters no longer offer robust protection against tax authorities. She, therefore, added that the continued use of such schemes poses enormous risks for the users.

    On questions relating to the recent leaks by Panana Papers and Paradise Papers, the Minister remarked that the leaks were just the beginning of what is likely to be a systematic unravelling of the offshore tax haven system.

    According to her, “the Federal Ministry of Finance’s data mining project would use data provided on Nigerians from such leaks to crosscheck tax declarations. She urged Nigerians to cooperate with the Government by paying the right taxes to both the Federal and State Governments in order to provide the much needed funds that will improve the lives of Nigerians.

    The Minister maintained that sanctions await defaulters who refuse the Federal Government’s offer of tax amnesty, including the full payment of outstanding tax liability and criminal prosecution.

    She said further that businesses, which untruthfully comply, would be liable as whatever was paid on the declared liabilities may be considered as part-payment of the outstanding sum later discovered by the authorities.

    On impetuous defaulters who fail to utilise the VAIDS window, Adeosun said such offenders would face criminal prosecution by the Federal Government.

  • Benefits of VAIDS

    Three weeks to the second expiration of the Voluntary Assets and Income Declaration Scheme (VAIDS), Assistant Editor, Nduka Chiejina looks at the build up to the introduction of the scheme and the possible benefits that can be derived from the successful execution of the laudable tax amnesty programme.

    The Voluntary Assets and Income Declaration Scheme (VAIDS), is part of measures instituted by Muhammadu Buhari administration to improve tax collection. It was brought in via executive order number 004 of 2017.

    The rationale for instituting VAIDS is to provide an opportunity for taxpayers, or amnesty for chronic tax defaulters, to voluntarily declare their assets and income and pay taxes due on them and in return obtain some benefits.

    As part of this government’s exclusive economic pathway to growth, President Muhammadu Buhari, last year, launched the Economic Recovery and Growth Plan (ERGP). Anchored by Vice President Yomi Osinbajo with a totally buy-in by the economic team, Minister of Finance, Mrs. Kemi Adeosun, conceived the tax amnesty programme, Voluntary Assets and Income Declaration Scheme (VAIDS), “as first in the series of reforms that will transform the nation’s tax system and provide sustainable and predictable funding for all tiers of government.”

    The scheme was designed to take effect from July 1, 2017 with nine months amnesty window initially scheduled to end in March, 2018, but the deadline was shifted to July 2018 to enable more tax defaulters take advantage of the scheme.

    Giving more insight into the scheme, the Minister of Finance, Mrs. Kemi Adeosun, said that VAIDS is designed for all federal and state taxes like Companies Income Tax, Personal Income Tax, Petroleum Profit Tax, Capital Gains Tax, Stamp Duties, Tertiary Education Tax, Technology Tax and Tenement Rate.

    The VAIDS amnesty programme she said also covers all back taxes for the last six years in line with the statutory periods of limitation under the relevant tax statutes. She noted that some individuals were “charging non-allowable personal expenses to company accounts particularly with reference to overseas school fees; and inconsistency between income declared for tax purposes and the value of assets owned.”

    According to Adeosun, “VAIDS specifically targets taxpayers who have not being fully declaring their taxable income/assets; have not been paying the tax due at all; have been underpaying or under remitting; are under a process of tax audits or investigations with the Relevant Tax Authorities; are engaged in tax disputes with the Relevant Tax Authorities but are prepared to settle the tax dispute out of court; new taxpayers who are yet to register with the tax authorities; and existing registered taxpayers who have new disclosures to make.”

    Commenting further, Adeosun noted that “it does not matter whether the relevant tax default arose from undeclared assets within or outside the country. If tax should have been paid, the Voluntary Asset and Income Declaration Scheme is providing a once in a lifetime opportunity to declare the tax outstanding and resolve it definitively”.

    She assured that anyone who takes advantage of the scheme to declare their assets and income for the purposes of taxation will be free to transfer their assets that they had previously held in nominee and other names into their own name.

    According to her, “many Nigerians have lost assets in the course of trying to conceal such assets from the authorities. Such losses typically occur in the event of death or an urgent need to liquidate assets when required documentation and proof of ownership cannot be provided. The global focus on illicit financial flows is such that global regulations will only become tighter with time, thus this opportunity to regularise ownership of assets should be seized as proper declaration allows assets to be legally and formally held by the true owner.”

    Other advantages for those who participate in the scheme she pointed out “include freedom from prosecution for past tax defaults, as provided in the law. Those taking advantage of the Scheme by declaring honestly and fully will be free from prosecution and will qualify for forgiveness of penalties and interest.”

    The Federal Inland Revenue Service (FIRS) had revealed that the total number of taxpayers in the country before VAIDS was introduced last year was around 13 million, with a preponderance of the tax payers, around 96% being those in paid employment, and whose taxes were deducted at source under the Pay As You Earn (PAYE).

    However, months into the programme, the number of tax payers had swollen to over 19 million with local and foreign companies operating in the country now taking advantage of the VAIDS to regularise their tax status. A few days ago it was disclosed that the federal government had raked in N30 billion from the VAIDS initiative with the possibility of the amount increasing before the end of the programme.

    The Deputy Director, Tax Policy and Advisory Department, FIRS, Gabriel Ogunjemilusi stated that “the tax amnesty programmes, from the lessons learnt from other countries, were very successful and Nigeria situation cannot be different. With the domestication of the automatic exchange of information effective April 1, 2018, adoption of Common Reporting Standards and the current updating of third parties data on taxable persons by government, there will be no more hiding place for tax evaders.”

    “Prior to the introduction of the scheme last year, Nigeria’s tax-to-Gross Domestic Product ratio was one of the lowest in the world. As of May 2017, of the roughly 70 million Nigerians who were economically active only 14 million or 20 per cent paid any federal or state taxes. The number of Nigerians who paid more than N10m in self-assessed taxes is even more astonishing. As of December 2017, only 943 Nigerians paid self-assessed taxes of over N10m and of that number, 941 live in Lagos State, the other two live in Ogun State,” Ogunjemilusi.

    Happy States

    It was common knowledge that the states and the federal government were always at loggerheads over who gets what, especially how much, when it comes to sharing money. With insufficient funds coming from the sale of crude oil into the federation account, poor tax collecting history and weak Internally Generated Revenues (IGRs), many state governments found themselves in deep financial trouble so much so that they couldn’t pay salaries except for very few of them.

    In comes the Voluntary Assets and Income Declaration Scheme (VAIDS) and all the states, having seen the benefit of the scheme, are cooperating with the federal government for the success of the scheme.

    This is so because the tax components which the VAIDS amnesty targets are jointly operated by the federal and state governments and the scheme has opened a vista of opportunity for the states to pocket more resources hitherto unknown to them. Now many states have jumped onto the wagon of VAIDS and are willingly exchanging information and data with the federal government to help identify individuals and corporate entities prime for taxing.

    The states have bought into VAIDS so much so that they gave the Federal Government all the necessary support. At an interview with journalists on VAIDS, Adeosun expressed happiness with the level of cooperation from the state governments. She said: “all the states are involved in way or another through the Joint Tax Board. Every state is now getting more people into their tax net. We have realized that taxes are sustainable source of revenue for government and government as you know cannot fully depend on oil. We cannot be going to FAAC always asking how much can we share this month.”

    Now, the focus of sourcing revenue has shifted from sharing to generating and collaborating with the federal government to harvest more revenue. the focus now is on internal generation of revenue. According to Adeosun, “the VAIDS train visited a few states where governors received the programme with open arms; pledging cooperation for a successful execution.”

    Kaduna state Governor Nasir El- Rufai in his exuberant manner promised during a stakeholders’ meeting on VAIDS in Kaduna state that his government would make available detailed data of assets, landed properties owned by wealthy Kaduna state individuals that escape taxes.

    Growth Imperatives.

    Revenue mobilisation is potentially the master key to unlocking Nigeria’s growth potential by massively financing its huge infrastructure projects including roads, power, health and rail. Regular payment of taxes by Nigerians and corporate organisations is fundamental to the country’s growth and development. The country needs predictable revenue inflow, which is very essential for increasing investments by the federal and state government in infrastructure.

    Total tax revenue as a percentage of GDP indicates the share of a country’s output that is collected by the government through taxes. Therefore, there is a strong relationship between GDP and tax revenue. GDP is an indicator of a nation’s economic health, and economic growth is a major driver of the level of tax revenues. When tax revenues are up, they point to an economy that is in a better health. In the event of a financial meltdown occasioned by a fall in revenue from the sale of export commodities, the government can rely on a good tax base to fund its activities like pay salaries and contractors for the provision of infrastructure and services.

    With VAIDS on track, Adeosun stated that all states of the federation now get more taxpayers in their tax net thus increasing their IGR. According to her, “every state is now getting more people into their tax net. We realised that taxes are sustainable source of revenue for government and government as you know cannot fully depend on oil. “We cannot be going to FAAC (Federation Account Allocation Committee) always asking how much can we share this month,” she said.

    According to her, the focus had shifted from sharing to internally generated evenue. Under the Economic Recovery and Growth Plan (ERGP), The government made a key development objective of raising tax revenue from 6% to 20% by 2020. Both the ERGP published in March 2017, which seeks to keep the fiscal deficit within the boundary established by the Fiscal Responsibility Act, and the draft 2018 Budget emphasise this revenue target.

    Tax administration remains a veritable source of revenue to initially supportrevenue realized from commodity export. This will involve measures such as increasing non-oil tax revenue through a series of tax administration initiatives (improving tax compliance, broadening the tax net, employing appropriate technology) combined with tax policy reforms (strengthening tax legislation, introduction of tax on luxury items, and other indirect taxes to capture a greater share of the informal economy.

    With the interest generated by the VAIDS Programme, it appears Nigeria is on the path to growing its tax base significantly to challenge revenue from oil.

  • Fed Govt rakes in N30b from VAIDS

    The Federal Government has raked in nearly N30 billion through the Voluntary Assets and Income Declaration Scheme (VAIDS), the Chairman, Federal inland Revenue Service (FIRS) Mr. Tunde Fowler, said yesterday.

    Speaking in Abuja during the official presentation of VAIDS certificate of declaration to chairmen of states’ tax revenue authority, he said the VAIDS windfall was championed by FIRS which was “responsible for the collection of 90 per cent of the amount, while the states were responsible for the 10 per cent collection balance”.

    According to him, the N30 billion so far mopped up from the tax scheme is N3  billion higher than the previous N27 billion recovered a few months ago.

    He reminded members of Joint Tax Board (JTB) that the beauty of VAIDS went beyond financial gains but, rather its potential of expanding the tax net. To this end, he said the programme has also boosted the nation’s tax data base from 14 million to 19 million.

    Fowler said the N30billion recovered so far VAIDS which is expected to terminate in three weeks time, was from both individuals and corporate bodies.

    “Looking beyond the financial returns of the scheme, the impact it has had in promoting voluntary compliance is unquantifiable. One of the outcomes of the scheme, whether directly or indirectly is the growth of the national tax payer database from under 14 million pre 2016 number to over 19 million in 2018, and we are confident that these numbers will translate into a positive growth in the country tax revenue to GDP ratio when the official percentage for 2017 have been released,” he said.

    He expressed delight that some states have achieved significant progress in the  scheme’s compliance. He said this explained why Executive Chairmen of revenue services of such states were invited to share their experiences.

    He admonished State Revenue Chairmen to constantly engage in enlightening tax payers about voluntary tax compliance as a way of building a friendlier tax environment.

    Fowler said VAIDS tax certificate presented to states  is not the same with tax clearance certificate, saying one can’t replace the other.

    Aside from VAIDS, Fowler said in recent times, the incidence of illicit financial flows, aggressive tax avoidance and outright tax evasion have come into the front burner. “The international community recognised the need to present a united front against this trend, which is a limiting factor in the quest towards exploiting the inherent potentials of tax as a viable alternative to sustainable revenue generation, especially for developing and emerging economies, have designed and is implementing a number of initiatives that will leave no hiding place for the tax evader,” Fowler said.

    As part of activities lined up to ensure increased awareness of the scheme in particular and tax compliance in general, staff of JTB Secretariat in collaboration with the Federal Ministry of Finance will take part every Thursday in tax sensitisation exercises in the states until the end of the scheme commencing from 14th June, 2018.

  • VAIDS: Tax with human face please

    Sir: Voluntary Assets and Income Declaration Scheme(VAIDS) was introduced by the current administration as an initiative designed to encourage voluntary disclosure of previously undisclosed assets and income for proper evaluation of payabletaxes.

    It has been implemented by the FIRS in collaboration with all the 36 State Internal Revenue Services. The campaign commenced at the Headquarters of Ministry of Finance in Abuja with top officials of the ministry, as well as the Federal Inland Revenue Service visiting markets and other popular places to sensitize people of the need for voluntary tax compliance.

    The Minister of Finance, Kemi Adeosun while speaking on the campaign earlier, said   through data collected, the Federal Government has detected many people whose lifestyle do not justify the tax they pay, or who do not pay any at all. She assured such people will not be prosecuted or made to pay their tax arrears if they file the proper returns and regularize their tax payment before the VAIDS deadline which has now been moved from March 31st to June 30.

    For those with assets abroad, the minister said the Automatic Exchange of Information (AEoI), to which Nigeria is a signatory will deliver data on such with or without a formal request.

    In the words of Madaki  Ameh a legal Practitioner, ‘’the basic justification of the state in collection of taxes remains the need to raise funds to provide amenities for the common good.  Where those amenities are either lacking completely, or where they exist, are largely provided by the citizens themselves without any input from government, then the moral or legal right of the State to impose such taxes becomes suspect.

    He further explained that   in caring societies, the government provides a sense of belonging to all its citizens, irrespective of whether they are strong or weak. Those who are strong and able to work are consciously encouraged to engage in gainful ventures, which create wealth. Others who are not so lucky, either due to ill health or other causes, are recognized as such by the society and provided for in a caring manner”.

    “In Nigeria however, the reverse is the case. The few people in government consume most of the national wealth through a bogus government bureaucracy, which adds next to no value to the lives of the people.  Government recently admitted that 85% of the national budget is spent on recurrent expenditure, leaving only 15% for all other expenditure that touches the lives of the people. Meanwhile, less than 1% of the total population of the country works for government, and another very few are engaged in any form of meaningful employment.”

    “The irresponsible way the national wealth is frittered away without any form of accountability to the people, makes public office very attractive in Nigeria.”

    Speaking on the taxation policy of this current Administration, Mr Ebenezer Landue an Economist explained   that, taxation is a compulsory levy paid by the citizen and imposed by a public authority. Tax is an important fiscal policy measure used by the public authority to bring about price stability, stimulate economy, redistribute income and reduce inequality. As good as taxation is, it must be flexible, convenient, simple, certain, elastic, economical, productive and balanced.

    A tax system should encourage savings, production and investment. It should help to maintain full employment, stabilize prices, maintain equilibrium balance of payment and economic development.

    The imposition of a certain levy or tax on a group of people like VAIDS should be for a certain purpose, a certain time frame to raise income for either the payment of government debt, certain unforeseen expenditure like war, disaster etc.

    It is hope that VAIDS would not be a counterproductive tax which will discourage productivity and enterprise.

     

    • Comfort Yakubu, Abuja.

  • Buhari extends VAIDS deadline to June 30

    President Muhammadu Buhari has approved the extension of the Voluntary Assets and Income Declaration Scheme (VAIDS) to June 30.

    The Federal Inland Revenue Service (FIRS) says it has  so far recovered N28 billion from tax defaulters through the scheme.

    The short extension after the original March 31 date is based on the appeals of professional bodies and individual taxpayers.

    A statement endorsed by the Special Adviser on Media and publicity, Femi Adesina, said there won’t be further extension of time after June 30.

    The president added that a new date was also given, based on the conviction of the Ministry of Finance that the overall objective to increase compliance will be attained, and additional revenue will accrue.

    A fresh Executive Order will be made to give legal backing to the new timeline.

    He said: “For a nation of people who are competitive and driven, it is not a pride that we are the lowest performer in tax to GDP, not just in Africa, but in the world.

    “Nigeria’s growth needs are such that every Nigerian must do his duty to his nation, to his neighbour, and to himself.

    “Hiding monies overseas, evading taxes by manipulation, and other unwholesome practices, have never developed a country, and for Nigeria to attain her true potential, these must stop.”

    Buhari urged Nigerian companies and individuals to join government in the rebuilding mission, “and do the right thing by taking this window of extension to regularise.”

    He added that the right thing may not be convenient or comfortable, “but in the long run, we will all have a nation we can be proud of.”

    Buhari further urged tax authorities to use the extension window to perfect plans to prosecute those who fail to regularise their tax status.

    The FIRS says it has partnered the Economic and Financial Crimes Commission (EFCC) to go after tax defaulters.

    Speaking when he led a delegation of tax officials to the EFCC office, FIRS chairman, Babatunde Fowler, said Nigeria is looking inwards to raise its economic base.

    “Through the intervention of the EFCC, the agency has been experiencing a high level of tax compliance and it’s yielding positive results,” a statement endorsed by EFCC spokesman, Wilson Uwujaren, quoted Fowler to have said.

  • VAIDS: FG reviews pleas for extension of deadline

    The federal government may bow to pressure as it has started reviewing the requests by the States and private sector for an extension of the tax amnesty programme, the Voluntary Assets and Income Declaration Scheme (VAIDS).

    Minister of Finance, Mrs. Kemi Adeosun, on yesterday confirmed that the Federal Government was currently reviewing the requests by the States and private sector for an extension of the tax amnesty programme, VAIDS.

    The tax amnesty programme, which expired midnight on yesterday, offered a nine-month window of opportunity for tax payers to regularise their tax liabilities.

    A statement by Oluyinka Akintunde Special Adviser, Media and Publicity to the Minister of Finance said “Adeosun, who responded to media enquiries in Abuja, said some States of the Federation and the private sector had asked for an extension of the deadline in order to allow them more time to comply.”

    She said, “the federal government is reviewing the numerous extension requests by the States and the private sector, which have cited some logistic challenges such as non-availability of the declaration forms in some states and the declaration of public holidays to commemorate Easter.”

    The finance minister was quoted to have said that “the tax evaders risk forfeiting their assets and prosecution as the government’s data mining Unit in the Federal Ministry of Finance, Project Lighthouse, had compiled data of tax payers from land registries from 36 States and Federal Capital Territory as well as their bank accounts.”

    According to Adeosun, “we have also received tremendous support from foreign countries which provided data under the exchange of information protocols. The data include bank records and financial filings for tax purposes.”

    The Project Lighthouse has identified the common violations by non-compliant tax payers to include: Under-declaration of and non-declaration of income earned including income from Government contracts and overseas trading; Collection of Value Added Tax (VAT) which is not duly remitted to the FIRS; charging of non-allowable personal expenses to company accounts particularly with reference to overseas school fees; and Inconsistency between income declared for tax purposes and the value of assets owned.

  • VAIDS: President under pressure to extend deadline as amnesty ends today

    As the tax amnesty under the Voluntary Assets and Income Declaration Scheme (VAIDS) ends on Saturday, some private sector players are said to be lobbying President Muhammadu Buhari to extend the amnesty period.

    An official at the Presidency, who craved for anonymity, told the News Agency of Nigeria (NAN) yesterday that governors and company owners had called the President and Vice President to push for the extension of the programme.

    “We are expecting Mr President to make an announcement on the tax amnesty deadline by this weekend.

    “To be frank and honest, nobody knows whether the President will decide to extend it or not, but there has been calls by state governors and key private sector players calling for the extension.

    “However, it still remains unclear if the President will take the recommendation to extend it by another three months, since he had been advised otherwise by the Minister of Finance and Federal Inland Revenue Service (FIRS) chairman,’’ the source said.

    Meanwhile, the Adamawa state Commissioner for Finance, Mr Mahmoud Yunusa, told NAN that many of the states were in support of extending the tax amnesty past the March 31 deadline.

    “It should be extended because people are just beginning to buy into the programme. We see people coming up willingly to declare their assets and it shouldn’t end soon.

    “Nigerians deserve more time and I believe that some of them are still collating their assets to know their worth before doing so.

    “Also, some haven’t declared because they operate businesses without any formal documentation, so it will take time before they get their books in order.

    “So it’s my opinion that extending it for another six months would ensure better success,’’ he said.

  • Firms fret over capital market’s VAIDS’ tax audit

    Quoted companies and capital market operators are anxious about the modus operandi and implications of the compliance tax audit for the Voluntary Assets and Income Declaration Scheme (VAIDS) by the Securities and Exchange Commission (SEC).

    SEC had in a circular indicated that it would audit public limited liability companies (Plcs) and capital market operators to ascertain their level of compliance with relevant tax laws.

    In the circular, the regulator stated that all public limited liability companies and capital market operators shall be required to show evidence of compliance with the VAIDS or a clean tax status as part of their mandatory submissions to the Commission from March 31.

    The Commission stated that failure to comply with relevant tax laws and the VAIDS “shall result in appropriate sanctions in accordance with the law”.

    Two weeks to the deadline, The Nation’s check at the weekend indicated that quoted companies, major shareholders, directors and market operators, who all fall within the regulation of the apex capital market regulator were anxious that the SEC’s VAIDS tax audit may have disruptive effect on the capital market.

    A capital market operator, who spoke under anonymity, noted that such tax audit may lead to “lifting the veil” on several ownership structures, special purpose vehicles and nominees transactions and could place additional burden of disclosures and compliance on companies.

    Another operator pointed out that several capital market operators are owned largely by individuals who brought many other directors on board to create a sense of diversified ownership, noting that such audit may scare such directors away or place the responsibility of ensuring compliance on the company.

    Many stakeholders also raised concerns about the capacity of the apex capital market regulator to conduct such tax audit, noting that such tax audit could lead to unnecessary delay in approvals and further stretch the resources of the Commission.

    “SEC lacks the required resources to undertake such compliance audit. The absence of any follow-up guidelines to the circular has left most of us working only on good faith and best efforts since we don’t know what else SEC will be looking for beyond the disclosures to the relevant tax authorities,” a chief executive of an investment firm stated.

    A major capital market operator however said the VAIDS may not apply as much to the capital market, noting that research has shown that quoted companies have the highest compliance in tax payment.

    “Most quoted companies pay tax and I don’t think they would have any hassle in showing compliance. As for capital market operators, I can speak for myself that we do pay tax and I think others do too. So, VAIDS is for those who don’t pay tax and capital market firms may not come under this category,” the operator said.

    A non-executive director in a healthcare company described the VAIDS’ circular by SEC as unnecessary grandstanding, noting that tax audit is not part of SEC’s functions.

    “That is not SEC business; there is an agency of government that is saddled with that, that is the Federal Inland Revenue Service (FIRS). Companies annually make provisions and pay taxes and their audited accounts are publicly available. If there is any infraction, the FIRS knows what to do, what has SEC gotten to do with that. There should be a separation of duties and functions,” the director stated.

    SEC has however not responded to media enquiry seeking clarifications on the circular and the VAIDS audit.

    The Federal Government had on June 29, 2017 signed Executive Order No. 004 “Voluntary Assets and Income Declaration Scheme” (VAIDS), which provides for an opportunity for taxpayers who are in default on their tax obligations under all relevant Federal and State tax laws, to regularise their tax status relating to previous tax periods and to fully and honestly declare their assets and income from sources within and outside Nigeria, and pay the taxes due on them within a period of nine months, commencing from the July 1, 2017 to the March 31, 2018.

    SEC had in its circular cautioned all public companies and capital market operators that while the statute of limitations for a tax investigation for honest returns is limited to six years, there is no limit where a fraudulent return has been submitted for assessment,” SEC had stated.

    “Consequently, all capital market operators and public limited liability companies who are in default or contemplated within the Executive Order, are expected to take advantage of the nine months grace period to rectify their tax status in compliance with the order,” SEC had stated.

     

  • VAIDS: Fed Govt warns against fake tax officials

    VAIDS: Fed Govt warns against fake tax officials

    The Federal Government has raised the alarm over the activities of fake tax officials, who want to swindle unsuspecting public over the Voluntary Assets and Income Declaration Scheme (VAIDS).

    Minister of Finance Mrs. Kemi Adeosun yesterday advised tax payers to demand for written notice when they receive phone calls from tax officials.

    She gave this advice in response to the activities of some fake tax officials alleging to be officials of the Voluntary Assets and Income Declaration Scheme (VAIDS).

    A statement issued yesterday  by Special Adviser, Media and Communications to the minister Oluyinka Akintunde said: “My attention has been drawn to reports of some unidentified tax officials requesting for bank details and address of tax payers.

    “If you receive a phone call from someone claiming to be from the Tax Office, do not panic. Ask them to send you a written notice. Do not provide any details like your address or bank details,” she urged.

    The statement added that Kaduna State Governor Nasir el-Rufai and Mrs. Adeosun honoured a consistent tax-payer, Elder Lema Jibrin.

    It said: “Jibrin was honoured during the VAIDS sensitisation programme in Kaduna last Thursday.

    The governor noted that Jibrin had consistently paid tax to the government for 40 years.