Business
- By Anayo Ezugwu
PRICEWATERHOUSECOOPERS, PwC, Nigeria has charged journalists in the country to educate the populace on why they should pay tax. It stated that the media must leverage on its role in the society to facilitate the right conversation on the Voluntary Assets and Income Declaration Scheme, VAIDS.
Taiwo Oyedele, partner, head, Tax and Regulatory Services, PwC Nigeria, said journalists must educate themselves so as to be able to educate others, especially the populace who look up to media for right direction. At the PwC Capability Enhancement Workshop for Journalists, in Lagos, on Tuesday, October 3, he enjoined the Nigerian media to the public to take advantage of the VAIDS.
According to him, VAIDS would propel more citizens’ engagement in the demand for accountability and transparency in government. VAIDS is a scheme introduced to change the narrative of tax challenges and inadequacies in the country, which could be done either online or offline. Oyedele pointed that those desirous of using online should visit http://www.vaids.gov.ng and those for offline could visit any tax office nearest to them.
“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,” he said.
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, he said.
Oyedele said Nigeria’s low tax revenues are at variance with the lifestyle of a large number of its people and with the value of assets known to be owned by Nigerians resident around the world. In addition, he said despite having some of the most profitable and well capitalised companies in Africa, the level of tax remittance is low. “As part of the global support to rebuild Nigeria under President Muhammadu Buhari, the federal government has secured the cooperation of a number of nations in its quest to repatriate funds due to it.
“Nigeria has also signed agreements with a number of nations, which provide for automatic exchange of information. These agreements allow the exchange of information between tax authorities of different countries and about financial accounts and investments to help stop tax evasion. Countries who are party to this agreement include Switzerland, Panama, the Bahamas and other tax havens. Additionally, banking information will easily be shared across countries due to newly implemented Common Reporting Standards, CRS.”
On his part, Kenneth Erikume, tax partner, PwC Nigeria, said investigations revealed that lack of trust in government to transparently manage tax revenue remains the largest concerns of citizens, especially among tax payers. He listed some of the benefits of participating in VAIDS to include no interest, no penalties, no tax prosecution and no tax audit.
He said: “Tax evasion is a crime punishable, upon conviction, by imprisonment of up to five years, while the taxpayer will still be required to pay the tax due along with the associated interest and penalties. Typically, a penalty of 10 percent of the tax due is assessed, along with related interest charges that accrue at 21 percent per annum, commencing from the due date related tax charged.
“In some cases, the penalty assessed is 100 percent of the tax due and further, the related assets are liable to be forfeited. 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. Another benefit of participating in the scheme is that taxpayers will be able to transfer assets that they had previously held by nominees into their own name. It should be remembered that many Nigerians have lost assets in the course of trying to conceal them 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 should be seized. Declaration allows assets to be legally and formally held by the true owner.”
– Oct. 6, 2017 @ 14:57 GMT |
Tags: Kenneth Erikume Oyedele PricewaterhouseCoopers urges Nigerian media to educate the public on why they should pay tax Taiwo Oyedele VAIDS Voluntary Assets and Income Declaration Scheme
