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By Anayo Ezugwu
AT last the federal government yielded to the demands of tax payers in Nigeria by extending of the Voluntary Assets and Income Declaration Scheme, VAIDS, to June 30. President Muhammadu Buhari approved the extension of the VAIDS following appeals of professional bodies and individual taxpayers.
A statement by Femi Adesina, special adviser to the president on Media, stated that there would be no further extension of time after June 30. According to the statement, a fresh executive order will be made to give legal backing to the new timeline.
The statement noted that, the new date was also given based on the conviction of the ministry of finance that the overall objective of increasing compliance would be attained to accrue additional revenue. “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.”
The President urged Nigerian companies and individuals to join government in the rebuilding mission, “and do the right thing by taking this window of extension to regularize. 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,” the statement said.
President Buhari, the statement noted, further urged tax authorities to use the extension window to perfect plans to prosecute those who fail to regularize their tax status. The statement described VAIDS as “one of the key policies being used by the federal government to reposition the Nigerian economy and correct inherited underdevelopment.”
President Buhari had last year launched the Economic Recovery and Growth Plan, ERGP, and the VAIDS tax amnesty is first in the series of reforms that aimed at transforming the tax system and provide sustainable and predictable funding for all tiers of government.
The country has one of the lowest tax collection rates in the world at just six percent of GDP. This was partially a function of the reliance on oil that saw us abandon the historical revenue collection systems and switch to a culture of sharing resources, rather than generating them.
Prior to the extension, Realnews reported that the federal government was under pressure from prominent Nigerians and corporate tax payers to expend the exercise for another six month. But the government was determined to commence the prosecution of offenders from Sunday, April 1, through its proposed special tax courts to prosecute those who failed to regularise their tax status under VAIDS.
This magazine also gathered that individual and corporate tax debtors have been approaching federal and state tax authorities to seek information on how to declare their previously unpaid taxes before the window shuts on March 31.
The rush, according to the VAIDS office in the federal ministry of finance, is on account of the fact that hidden assets and incomes have been discovered through the use of data obtained from a variety of sources, including government revenue-collecting agencies, bank verification numbers, BVN, payment platforms, land registries, Securities and Exchange Commission as well as the Corporate Affairs Commission.
The data showed that lifestyles of many do not match the taxes paid. Those in this category have had letters written to them nudging them to come forward and take advantage of the tax amnesty scheme, which gives them the opportunity to spread payment over a maximum three-year period, and have interests/penalties waived. Those who declare will equally escape prosecution, which the government has warned would follow at the closure of the window.
VAIDS is a time-limited opportunity for taxpayers to regularise their tax status relating to previous tax periods. Nigeria’s tax system is based on global best practice. It is a progressive system that ensures fairness. Those with the highest income levels should shoulder the greatest proportion of the burden. Whilst considerable progress has been made with taxing those in formal employment, self-employed persons, professionals and some companies are able to evade full tax payment due to the inability of the tax authorities to assess their true income and thereby tax them accurately.
According to the Joint Tax Board, JTB, as at May 2017 the total number of taxpayers in Nigeria is just 14 million out of an estimated 69.9 million who are economically active. Nigeria’s tax to Gross Domestic Product, GDP, ratio is six percent, one of the lowest in the world (compared to India’s 16 percent, Ghana’s 15 percent and South Africa’s 27 percent. Most developed nations have tax to GDP ratios of between 32 and 35 percents.
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– Apr. 13, 2018 @ 14:35 GMT |
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Tags: Buhari Why Buhari extended VAIDS Deadline
