Federal government back VAIDS in Nigeria

Federal government back VAIDS in Nigeria

 Federal government back VAIDS in Nigeria. VAIDS was formally launched in Nigeria with the signing of executive order by the Acting President of the Federal republic of Nigeria Professor Yemi Osinbanjo on Thursday 29th June, 2017.
VAIDS means Voluntary Asset and Income Declaration Scheme and is said to run for nine months period from July 1, 2017 to March 31, 2018.
This is a scheme inaugurated to enable by the federal government to grant amnesty to tax defaulters, who have evaded tax for selfish reasons.
They hereby call on all and sundry to take advantage of this scheme and declare their assets and income for the purpose of genuine and accurate tax remittance.
Since its initial proposition by the Organization for Economic Co-operation and Development (OECD) in 2010, more than 47 countries in the world have implemented the program in one form or the other including South Africa, Indonesia and Turkey, among others etc. Nigeria expect to generate US1 billion from the scheme, NGN20 billion was generated as at February 2018.
The aim of VAIDS in Nigeria is to provide taxpayers with a time limited opportunity to regularize their tax status relating to past periods, in terms of registration, returns filing, tax assessment and payment of all taxes due.
It also allows taxpayers to honestly declare their assets and income. They are also expected to pay the tax due in respect of the past six years, either in one lump sum or in installments, over a period of not more than three years as may be agreed with the relevant tax authorities.
The scheme is being implemented by Federal Inland Revenue Service (FIRS) in collaboration with the 36 State Internal Revenue Services and the FCT Internal Revenue Services.
Federal and state taxes covered include: Companies Income Tax, Capital Gains Tax, Withholding Tax, Personal Income Tax, Stamp Duties, Value Added Tax, Petroleum Income Tax, Tertiary Education Tax and NITDA levy.
INCENTIVES; Taxpayers who take advantage of VAIDS in Nigeria to make full and honest declaration of their assets and income will enjoy the following;
. Waiver of penalties and interest on taxes due
. Immunity from criminal prosecution for tax offences
. Confidentiality of information supplied
. Exclusion from tax audit/investigation relating to the period covered by the declaration
. Negotiable instalment payment for the outstanding tax liability up to a maximum period of three years.
. Opportunity to regularize ownership of assets/ investments owned via proxy i.e tax payers will be able to transfer assets that they had previously held by nominees into their own name, rather than lose the assets in the course of trying to conceal them from the authorities.
CONSEQUENCES OF NON-DECLARATION
. Taxpayers who fail to participate in the scheme will be investigated and if found culpable, will be subject to criminal prosecution.
. A “name and shame “ list of tax evaders will be published.
. May forfeit assets both locally and overseas.TARGET FOCUS
VAIDS in Nigeria is still open to all individuals and corporates who are in default on their tax liabilities.
The Scheme is specifically targeted at persons or entities who:

. Have not been fully declaring their taxable income/assets

. Have not been paying the tax due at all

. Have been underpaying or under remitting

VAIDS in Nigeria will focus on the following;

. Full time employees with multiple income sources

. Companies with understated revenues

. Use of offshore tax shelters uncovered

. Persons with lifestyle inconsistent with payments

. Entertainers

. High net worth families with complex tax situation

. Retirees with unexplained assets.

RELEVANT AUTHORTIES GET THEIR DATA FROM THE FOLLOWING SOURCES:

. Bank verification records (BVN)

. Engagement of the World’s leading private investigation firms

.Nigeria financial intelligent unit (NFIU) records

. Review of ownership of prime properties within Nigeria

. Review of land allocation and land ownership in selected high value areas

. Review of major payments made by the federal government of Nigeria

. Foreign exchange allocation returns and Bureau De change (BDC) information

. Beneficial ownership records

. Information provided by foreign governments.

. Foreign account tax compliance Act (FACTA) information.

. Review of corporate Affairs commission (CAC) records

.Review of central securities clearing system (CSCS) share ownership records

.Review of panama papers/ Wikileaks records.

WHY VAIDS in Nigeria?
. According to the Joint Tax Board (JTB), as at May 2017 the total number of taxpayers in Nigeria is 14 million out of an estimated 69.9 million (about 201%) who are economically active.

.Nigeria’s low tax revenues are at variance with the lifestyles of a large number its people and with value of assets known to be owned by Nigerians resident around the world.

. Despite having some of the most profitable and well capitalized companies in Africa, the level of tax remittance is low.

Government has decided to take the pragmatic approach of offering an amnesty window to allow Nigerians, who may have evaded tax, whether ignorantly or deliberately, the opportunity to their civil duty and pay the appropriate taxes whilst providing much needed revenue for infrastructure and development.

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