The Nation Newspaper

Tag: VAIDS

  • Fed Govt releases guidelines for VAIDS

    Fed Govt releases guidelines for VAIDS

    The Ministry of Finance yesterday explained the process of participation in the Voluntary Assets and Income Declaration Scheme (VAIDS) to those not remitting appropriate taxes.

    According to the VAIDS office in the ministry, the first step for new taxpayers is to apply for a Tax Identification Number (TIN). The existing taxpayers are to register for VAIDS by filling the declaration form, obtainable from relevant tax authorities and available online.

    The tax authority can help to calculate a taxpayer’s liabilities. Besides, the VAIDS office has also trained professionals in tax advisory services to educate taxpayers on their obligations.

    VAIDS, which provides a time-limited opportunity to regularise tax status, is open to every taxpayer liable to pay tax in Nigeria.

    “It covers Nigerian residents, who had taxable undeclared income outside Nigeria and non-residents, who earned undeclared income derived from or accruing from Nigeria”, the VAIDS office explained.

    Nigerians in the Diaspora can declare online or appoint a local agent to declare on their behalf.

    The tax authority will, however, review the tax information provided by declarers to ensure they are accurate. The ministry assured that every information provided by declarers will remain confidential and strictly for use under VAIDS.

    The office warned that tax debtors who fail to declare at the expiration of the window in 31 March will face a variety of sanctions, including payment of interests and penalties as well as prosecution.

  • VAIDS: Fed Govt under pressure to extend tax amnesty deadline

    VAIDS: Fed Govt under pressure to extend tax amnesty deadline

    Nigerians owning property in the United Kingdom (UK) have inundated the Federal Ministry of Finance’s Voluntary Assets and Income Declaration Scheme (VAIDS) hotlines with calls in the last 72 hours, asking for extension of time to complete their declaration forms.

    Sources confirmed to The Nation yesterday that the unprecedented level of calls was not unconnected with the new UK regulation with regard to Unexplained Wealth Orders (UWOs).

    “Most of the calls received are from high net worth individuals, including company executives, bankers and even a governor. All seem to be in panic over the prospect of losing their investments,” said a source within the VAIDS Office.

    The official noted that some of the apprehensive Nigerian property owners stormed the Federal Ministry of Finance last Friday without appointments, requesting to see the minister and the Head of the VAIDS Office.

    The source said: “Most of the enquiries are about seeking assurances from the Federal Government that the VAIDs programme can protect them from potential asset forfeiture to the UK Government. Others requested to know if their names had appeared on the lists from overseas.”

    The sources added that the confidential hotlines that were provided to enable the booking of appointments had received massive calls and frantic requests from tax payers leading to the crash of the communication lines.

    The VAIDS source stated that “concerted efforts are ongoing to restore the hotlines following the crash on Friday”.

    The UK Government had last week introduced a new law that requires foreign owners of properties to explain the source of their funds or risk forfeiting them to the government under UWOs.

    According to the new law, the UWOs can be obtained for any property or combination of properties valued at just £50,000 (about N25 million) or more, for which the owner is unable to explain legal source of funds.

    The Nation learnt that data already in the possession of the VAIDS Office in Federal Ministry of Finance reveal that many UK property owners have underpaid their taxes before transferring funds overseas to buy property.

    Efforts made by The Nation to speak with the spokesman of the Minister of Finance, Oluyinka Akintunde, were unsuccessful.

    Text messages sent to him were yet to be responded to as at the time of filing this report.

    The UWO law, coupled with the revelation that many foreign governments are automatically sharing bank and property information with Nigeria, has resulted in an upsurge in enquiries about the VAIDs programme.

    VAIDS allows Nigerian tax payers to restate their income and assets without limit and thus could potentially allow those who own property that cannot be explained by their previously declared income to regularise by declaring and paying the correct taxes.

  • Tax debtors panic as VAIDS steps up data collection

    Tax debtors panic as VAIDS steps up data collection

    Thousands of tax defaulters are already gripped by fear of being exposed following the intensification of transaction and income data collection by the Voluntary Assets and Income Declaration Scheme (VAIDS). The scheme, which provides a time-limit opportunity for tax debtors to regularise their tax status by truthfully declaring, ends on  March 31.

    VAIDS offices sources disclosed that income, assets and transaction data of millions of Nigerians have been obtained from a variety of sources, including land registries, banks, Federal Inland Revenue Service (FIRS), Corporate Affairs Commission (CAC), Nigerian Customs Service (NCS), Federal Airports of Authority of Nigeria  (FAAN) and numerous payment information platforms.

    The data has been analysed to yield tax debt profile of individuals and companies after which letters were written to defaulters, warning them to comply with VAIDS before the deadline. Owners of undeclared offshore assets are equally certain to be tracked through a variety of multi-jurisdictional agreements to which Nigeria is signatory. Among these are Automatic Exchange of Information (AEoI), which kicked off on January 1.

    It enables tax authorities in Nigeria to receive information, even without requesting, from tax authorities in other countries. The Federal Government has also started working on modalities for the implementation of the Common Reporting Standards (CRS), which will deliver taxpayers’ information to government directly from commercial banks.

    Full implementation of the CRS will enable the government receive information from accounts domiciled in countries by Nigerian tax residents.

  • VAIDS: Banks to supply customers’ data to tax authorities

    VAIDS: Banks to supply customers’ data to tax authorities

    Banks have been mandated under the Common Reporting Standard (CRS) principle to submit information on their customers, especially  High Net-worth Individuals (HNIs) to the taxman, The Nation has learnt.

    A Partner at PricewaterhouseCoopers (PwC), Esiri Agbeyi, said at the weekend that the move was part of the strategy adopted by the Federal Government to ensure the success of the Voluntary Assets and Income Declaration Scheme (VAIDS), which is meant bring more people into the tax net and move Nigeria’s tax to Gross Domestic Product (GDP) from six to 15 per cent.

    Agbeyi was speaking during the Premier Banking/ Securities, Wealth & Asset Management (SWAN), Ecobank Capital joint breakfast session with the lender’s top clients in Lagos.

    HNIs are bank customers with at least $1 million in investible assets. Of such customers, 12,000  live in Nigeria, according to Agbeyi.

    There are 6,800 HNIs in Lagos; 4,000 in Abuja. The rest are shared between Port Harcourt and other parts of the country. Many bank Chief Executive Officers (CEOs), executive directors and directors fall within the HNIs group.

    Esiri, who is a private wealth manager for HNIs and family offices, said Nigeria is operating under a high interest rate regime because it does not collect enough taxes. “The key issue is high interest rate. And why we have so much pressure on that is simply because we do not collect enough taxes.

    We have a dip in oil prices and there is pressure on borrowing and interest rates. One of the key moves initiated by the Ministry of Finance is the VAIDS because Nigeria’s tax to Gross Domestic Product (GDP) ratio is very low at six per cent but the target is to get it to 15 per cent. Bank’s executive directors and even top bank executives fall within the HNIs and are the key targets for government. The idea is that people come in to voluntary declare assets both home and abroad,” she said. She said Nigeria does not have the number of people it should have in the tax base, adding that a lot of HNIs do not pay taxes.

    Esiri said the CRS, which Nigeria has signed on to, is an automatic exchange of information programme between the banks and tax authorities. “Every bank has to submit information on their tax payer to the tax authority, which shares the information with other countries that have signed on with the CRS, and the countries will share information with Nigeria. So, it is the exchange of information through border. Nigeria signed on to it in August 2017,” she said.

    She said the Federal Government will need a lot of information to drive VAIDS in the manner they would want to drive it. “What is now required is for the banks to have the technology that is required under CRS, for them to be able to collect that data and for the tax authorities themselves to have similar technology that they can use to submit it. One of the key requirements is security. Nigeria is not there yet, it will take us a while to get there. I am not even sure that all the banks are aware about the requirements for CRS. There might be additional fields to be put on board. What happens is that may be in the next course of two years, we might have Nigeria fully take on CRS,” she stated.

    Esiri explained that it is on the back of the CRS that the tax authorities will come after those who have not taken advantage of the amnesty period provided by VAIDS to prosecute them.

    The CRS was developed in response to the G20 request and approved by the Organisation for Economic Co-operation and Development (OECD) Council on 15 July 2014 and calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis.

    The CRS sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions. “Ghana is one of the first African countries that have signed on to the CRS. So, Ghana will be submitting information already to the tax authorities this year,” she said.

    It was learnt that data mining on HNIs is ongoing in key institutions, including the Nigerian Customs Service and the Asset Management Corporation of Nigeria (AMCON) for all payments and receipts over N100 million between 2010 and 2015 while collection of data from personal bank accounts would follow.

    There will also be data collection from the Federal Inland Revenue Service, state lands departments, Corporate Affairs Commission (CAC), Securities and Exchange Commission (SEC), National Identity Management Commission (NIMC), land registries, treasury bills and Nigerian Inter-Bank Settlement System (NIBSS), Integrated Payroll and Personnel Information System (IPPIS), Nigerian Civil Aviation Authority (NCAA) and e-payment platforms.

    To drive the programme,, the Enugu State Government will on Thursday host officials of VAIDS, business leaders and traditional rulers.

    Minister of Finance Kemi Adeosun will lead the VAIDS team to be hosted by Enugu State Governor Ifeanyi Ugwuanyi and members of the state Executive Council.

    The event will hold at Base Event Centre,Enugu.

    VAIDS, which began last July,is a tax amnesty programme that  provides a time-limited opportunity for tax defaulters to truthfully declare their assets and incomes and spread payment of taxes owed on previously undeclared income and assets over a maximum three-year period.

    VAIDS also provides that voluntary declarers will be free of penalties and interests on owed taxes, tax audits and escape prosecution.

    Non-declaration at the expiration of the window on March 31, will lead to prosecution, which the Federal Government has repeatedly said it is willing to carry out.

    An estimated sum of $1billion is expected to be raised in taxes from the implementation of VAIDS.

  • Fed Govt targets more tax revenue from VAIDS

    The Federal Government expects to net considerable tax revenue this year through the implementation of the Voluntary Assets and Income Declaration Scheme (VAIDS). The scheme, an initiative of the Federal Ministry of Finance that provides a time-limited window for taxpayers with undisclosed income and assets to regularise their tax status.

    The Federal Inland Revenue Service (FIRS) Chairman,  Tunde Fowler, said the Federal Government received N17billion by early December 2017, and another N6billion was netted by the end of last year.

    The scheme, which terminates at the end of the first quater, on March 31, has been widely lauded as the solution to the meagre Tax-to-Gross Domestic Product (GDP) ratio of the country, which currently stands at six per cent. and bring more tax revenue for national development and check the near-total dependence on oil revenues, which has shrunk following the dip in international oil prices.

    Mrs. Kemi Adeosun, Minister for Finance, in December, said many individuals and corporate organisations with undeclared taxes, have been approaching tax authorities and expressing interest in declaring and paying up their taxes.

    Towards its implementation, the VAIDS office, beginning from October, has been harvesting financial data of tax payers through the cooperation of states, revenue-generating agencies of government, such as the FIRS, Nigerian National Petroleum  Corporation (NNPC), Central Bank of Nigeria (CBN), Federal Airports Authority of Nigeria (FAAN), Petroleum Technology Development Fund (PTDF), and the National Communications Commission (NCC).

    Data obtained from the agencies will be used to determine companies that have failed to remit taxes on earned income, those with undeclared assets, and corporate organisations that have collected taxes on behalf of government without remitting.

    Also state governments and the authority of the Federal Capital Territory have shown support for the scheme, by volunteering to provide transaction data necessary to identify defaulters.

    The VAIDS office, in addition to a variety of technological tools and international information-sharing agreements, will rely on data on contracts and transactions above N50million, obtained from the Nigerian Customs Service, Assets Management Corporation of Nigeria (AMCON) and Nigeria Export-Import Bank (NEXIM). Such data are currently being matched with those obtained from other agencies, like the FIRS, Corporate Affairs Commission (CAC) and Government Integrated Financial and Management Information Systems (GIFMIS) to determine companies that have not been paying taxes.

  • VAIDS: Expert urges govt to target rich tax payers

    To achieve the Voluntary Assets and Income Declaration Scheme (VAIDS) objectives, the Federal Government has been advised to deploy more resources that will enable it capture more tax revenues from high net-worth individuals.

    Speaking at a workshop organised by the Federal Ministry of Finance for tax professionals in Lagos,  a Professor of Tax and Fiscal Matters, University of Lagos, Abiola Sanni, said high net-worth individuals control over 80 per cent of the nation’s resources.

    He said more attention should be paid to this category of people if the government intends to rake in more money through the VAIDS, adding  that as critical as the informal sector is, less emphasis should be placed on the sector, which he said, is already heavily taxed and levied.

    He explained that 70 Community Tax Liaison Officers (CTLOs) have already been deployed nationwide to assist the states in enforcing tax compliance in the informal sector.

    “The weakness of our system is the over concentration on the middle class that are already over taxed through various means. The informal sector is very large and critical and arrangement has been made to bring in the sector into the VAIDS.

    “While the informal sector is very important, but for VAIDS to be very successful, we must look at high net-worth, a very few individuals who control large resources. In nations where the tax system works, they focus more on those people because a  billionaire can pay much more than all of us put together,” he said.

  • Revenues from VAIDS to hit N23b by year-end

    Revenues from VAIDS to hit N23b by year-end

    About N6 billion more is expected from the Voluntary Assets and Income Declaration Scheme (VAIDS), bringing the total revenues from the scheme to N23 billion by the end of the year, it was learnt yesterday.

    Federal Inland Revenue Service (FIRS) boss Babatunde Fowler, broke the news at a media workshop on VAIDS.  He said the scheme had yielded N17 billion within six months of implementation.

    According to Fowler, the scheme has generated enthusiasm among taxpayers, many of whom are coming forward to declare previously undeclared incomes.

    Fowler said VAIDS is necessary  now for the nation, particularly with shrinking oil revenues.

    At the workshop, experts presented papers on the role of data in VAIDS implementation, similar to tax amnesty programmes in other countries as well as how VAIDS works and its benefits.

    He said VIADS gives tax payers the oportunity to regularise their tax status.

    In exchange for honestly declaring previously undisclosed assets and income,tax payers benefit from the forgiveness of overdue interest and the assurance that they would not face criminal prosecution for tax offices or be subject to tax investigations.

    He said the  FIRS would offer free advisory services to taxpayers, who are ready to comply with the VAIDS. Fowler said the FIRS would help prospective declarers with documentation and advice, when the service is approached.

    According to the FIRS chairman, taxation is a more reliable source of revenue than oil. He urged those who have earned undeclared incomes to take advantage of the window provided by VAIDS to regularise their tax status.

    The workshop featured presentations by tax experts on the role of data in taxation, tax amnesty programmes in other countries and the provision of VAIDS.

    The FIRS’ Deputy Director, Tax Policy and Advisory Department,  Gabriel Ogunjemilusi  said  strengthening tax system has emerged as a key priority for the service in improving the resilience of the national economy and supporting its growth objectives.

    According to him, the country has been struggled to achieve its yearly tax collection targets, despite the valuable revenue stream its represents.

    Efforts, he added, have been made to broaden the country’s tax base by collecting new data on current and prospective individual and corporate taxpayers, to address tax evasion and avoidance.

  • Lagos shuts hotels over N354.75m tax evasion

    Lagos shuts hotels over N354.75m tax evasion

    The Lagos State Internal Revenue Service ( LIRS ) on Thursday shut 11 hotels, restaurants and event centres over alleged failures to remit their taxes under the Hotel Occupancy and Restaurant Consumption Laws of Lagos State 2009.

    Mr Seyi Alade, Director, Legal Services of the LIRS, said this after a state-wide tax law enforcement exercise in Lagos, adding that the firms owed the state government N354.75 million in unpaid taxes.

    Alade said that the government had started full enforcement of all aspects of tax laws on defaulting taxpayers.

    He further warned that failure to file Annual Tax Returns, false declarations in returns filed and evasion of taxes were criminal offences punishable by severe fines and jail terms upon conviction by a court.

    “Any failure to deduct and remit taxes as and when due in Lagos State will now attract very serious monetary penalties.

    “These penalties include sealing of the company, seizure of the goods and chattels and criminal prosecution of principal officers of recalcitrant entities.

    “We are presently prosecuting 52 high net-worth personalities and 20 entertainment celebrities before the State High Court for offences ranging from failure to file Annual Tax Returns, false declaration in Returns and tax evasion,”he said.

    He added that over 200 corporate bodies were currently being prosecuted before the High Courts for failure to file returns and remit their taxes to the government.

    Alade advised that taxpayers should take advantage of the window of opportunity created by the Voluntary Assets and Income Declaration Scheme (VAIDS), to regularise their tax status relating to previous tax periods.

    Read also: Ambode orders census of worship centres in Lagos

    “In exchange for full and honest disclosure of assets and income, such taxpayer will benefit from the forgiveness of overdue interests and penalties till the 31st December 2017.

    “Declarations made from 1st January 2018 will attract interest but no penalties up to the end of the scheme on March 31, 2018,” he said.

    He appealed to all taxable individuals and business entities operating in the state to ensure prompt remittance of their taxes to avoid the additional payments of interests.

    Alade added that business entities and taxable individuals who failed to remit their taxes promptly would also suffer penalties and disruptions to their businesses as a result of tax evasion.

    He listed Regia Luxuria hotel, Golden Hope hotel, Westown hotel, Liberty Hall, Seven Eagles Spur and El Shaddai Margvee hotel among others as some of the affected companies.

    NAN

  • VAIDS: FG insists no going back on March 2018 deadline

    The federal government has ruled out any possibility of extending the grace period given for the Voluntary Assets and Income Declaration Scheme (VAIDS).

    The Executive Chairman of the Federal Inland Revenue Service (FIRS), Mr Tunde Fowler, who gave this charge in Abuja, said the March 2018 deadline remains sacrosanct.

    Fowler made this disclosure at the VAIDS training programme, while responding to the request made by the President of the Chartered Institute of Taxation of Nigeria (CITN), Mr Cyril Ede, urging the federal government to consider extending the deadline from March to September 2018 to give more room for better compliance.

    According to Fowler, “professionals should help sensitize their clients to participate in VAIDS instead of asking for an extension as such option is not under consideration.”

    Fowler noted that the scheme was “a product of careful thinking that involved the inputs of various stakeholders including both chambers of the National Assembly.”

    Foreclosing on any extension, Fowler said, “both the House of Representatives and the Senate had endorsed the scheme, as a result, there has been a lot of buy-in on the scheme and there won’t be any extension.”

    He urged “all individuals and organizations to declare their assets and pay appropriate taxes before the March 31, 2018 deadline; when there will be no interests, penalties, tax audits and prosecutions.”

    According to Fowler said: “even if you give some people 10 years to regularise their taxes, they will not still comply. And someone who wants to perform his duties by paying appropriate taxes can do so in six months. It is the will that matters.”

    Going forward, Fowler assured tax payers that, “you don’t have to pay your tax on the day you declared your assets. Tax authorities can work out a deferment arrangement where you can pay the tax on a later date as agreed. That is subject to their approval.”

    VAIDS, he noted, allows Nigerians to honestly declare their assets and pay appropriate taxes between July 1 and March 31, 2018, when there will be penalties of any sort.

    “Nigeria as a country needs this programme seriously as our tax compliance level is low and should remarkably improve, especially now that our revenues from oil have reduced. So we need to open up non-oil revenue sources to operate. So, VAIDS has come to stay. Many big countries have gone through this. It won’t be extended,” Fowler said.

    In his remarks at the event, President of the Chartered Institute of Taxation of Nigeria (CITN), Mr. Cyril Ede, said the scheme will “ginger Nigerians to come forward without fear to regularise their taxes within the grace period. It is necessary for tax authorities to clean the Augean stable to allow tax defaulters put their house in order.”

    While acknowledging that the time was ripe for Nigeria to take decisive steps to increase its tax base, Cyril Ede asked that the March 2018 deadline should be shifted to September 2018, noting that South Africa gave a grace period of 11 months, even as a country with a better tax compliance level.

     

  • VAIDS begins video campaign

    The Voluntary Assets and Income Declaration Scheme (VAIDS) office has launched a video campaign to create awareness about the programme, promote voluntary tax compliance and boost tax education among Nigerians. This was disclosed in a press statement by the VAIDS Office in the Federal Ministry of Finance, the initiator of the programme.

    According to the statement, the campaign, domiciled on Youtube features short videos and skits depicting various scenarios of persons attempting to evade their taxes.  By its provision, VAIDS gives tax defaulters a time-limited opportunity to regularise their tax affairs by truthfully declaring and paying tax liabilities.

    VAIDS was conceived by the Federal Ministry of Finance in collaboration with federal and state tax authorities to correct the defective tax orientation in the country and reflects the desire of the Federal Government to widen the tax net while offering benefits to defaulters, who voluntarily and truthfully declare their assets and pay tax liabilities.