Imperatives of Voluntary Assets and Income Declaration Scheme (VAIDS) “There will be no hiding place for tax evaders”
Last Updated on February 18, 2019 by mofsite
Nigeria’s economy has depended predominantly on crude oil sale, until recently where emphasis has shifted from oil revenues to Internally Generated Revenue specifically from taxes as a veritable source of funding sustainable development and national security. This is direct fall out of the global financial meltdown which affected virtually every country of the world. It is also a known fact that government responsibilities in terms of development projects have also become increasingly enormous in the face of dwindling funds at her disposal.
Nigeria’s tax system is based on global best practice. It is a progressive system that ensures fairness which implies that those with the highest income levels should shoulder the greatest proportion of the tax burden. Whilst considerable progress has been made with taxing those in formal employment and 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 GDP ratio, at just 6%, is one of the lowest in the world (compared to India’s 16%, Ghana’s 15.9%, and South Africa’s 27%). Most developed nations have tax to GDP ratios of between 32% and 35%. Nigeria’s low tax revenues are at variance with the lifestyles of a large
number of its people with the value of assets known to be owned by Nigerian residents around the world. There has been a systemic breakdown of compliance in the tax system with various strategies used to evade tax obligations. These include but are not limited to transfer of asset overseas, the use of o_ shore companies in tax havens to secure assets, and the registration of assets in nominee names. In addition despite having some of the most pro_ table and well capitalized companies in Africa, the level of tax remittance is low. It is in the light of the above that the Federal Government via an Executive Order no. 4 of 2017 initiated the Voluntary Assets and Income Declaration Scheme (VAIDS) to improve voluntary tax collection. It is also aimed at providing opportunity for tax payers as well as an amnesty window for tax defaulters to voluntarily declare their assets and income and pay their due taxes to qualify for waivers in terms of tax arrears or underpayment for the past 6 years.
The scheme was initially designed to take effect from July 1, 2017 with nine months amnesty window scheduled to end on the 30th of March 2018, but in response to public appeals, the deadline was shifted to 30th June 2018 to enable more tax defaulters to take advantage of the scheme which covers all federal and state taxes like Company Income Tax, Personal Income Tax, Capital Gain Tax, Petroleum Profit Tax, Stamp Duties, Tertiary Education Tax and Tenement Rate. All taxable persons and entities including individuals, Trust, Executors, registered companies and statutory companies are also covered by the scheme.
The question one might be tempted to ask is why the emphasis on VAIDS
when I have been paying my taxes? The answer of course is simple. According to the Hon Minister of Finance, Mrs. Kemi Adeosun, VAIDS specifically targets tax payers who have not been declaring their income/ assets; those who have not been paying their due tax; those who have been underpaying or under-remitting taxes deducted. Also included are those who are engaged in one tax dispute or another with relevant tax authorities but are prepared to settle such disputes out of court tax payers who are yet to register with the tax authority as well as existing tax payers who have new disclosures to make concerning their assets and income. It is important to remark here that it does not matter whether the relevant tax default arose from undisclosed asset within or outside the country, what actually matters is that the scheme is providing a once in a life time opportunity for tax defaulters to declare their tax liabilities and resolve it amicably with the relevant tax authorities, be it Federal or State. VAIDS is a time limited opportunity for taxpayers to regularize their tax status relating to previous tax period in this case for the past 6 years. And in exchange for fully and honestly
declaring previously undisclosed assets and income, tax payers will benefit from forgiveness of overdue interest and penalties and the assurance that they will not face criminal prosecution for tax offences or be subject to tax investigation. In realization of the importance of the VAIDS scheme and the discovery that of all the States in the Federation, Cross River is ranked the lowest in terms of response rate to compliance, that the Cross River Internal Revenue Service held a three day sensitization forum in the 3 Senatorial Districts of the State for stakeholders to take advantage of the awareness campaign on VAIDS to regularize their tax positions devoid of penalties and interest for noncompliance.
According to the Acting Executive Chairman of the Cross River Internal Revenue Service Mr. Akpanke Ogar, in spite of efforts made by the CRIRS to generate awareness in the VAIDS program, the service observed that participation by residents in the State is abysmally low compared with result posted by other States In any case, the import of the VAIDS Scheme is that the window of opportunity will be closed automatically after the end of June 2018, thereafter, the law will take its course: and as the VAIDS slogan goes, ‘there will be no hiding place for tax evaders’, no matter your connection to the corridors of power or your position in the society. There shall be no sacred cows under VAIDS, everybody is expected to declare where they have previously underdeclared.
Stakeholders are enjoined to take advantage of this window of opportunity and visit the offices of CRIRS and FIRS for their VAIDS form. Where in doubt, please you can call
the Cross River State Internal Revenue
Service’s Helpdesk on 08025670608,
08066276829 or visit our website @
Good citizens pay their taxes; it’s your civic duty. Pay your tax to support Senator (Prof) Ben Ayade’s development projects.