FEDERAL Government has said that it wants to launch the Voluntary Asset and Income Declaration Scheme VAIDS to the nation; outlining the Federal Government’s plan to increase tax awareness and compliance, and grant tax payers a time-limited opportunity to regularize their tax status without penalty. A statement released by the Ministry of Finance explained that Acting President, Professor Yemi Osinbajo will launch the programme on 29 June 2017. The plan, to be executed jointly by Federal and State Governments, concentrates on the national duty of all Nigerian companies and citizens to pay their taxes, wherever their income is earned, wherever they reside and no matter how rich they are. The statement argued that Nigeria’s tax-to-GDP ratio is one of the lowest in the world at 6% and Tax evasion leaves an unfair burden of payment on those who can afford it least – Nigeria’s poorest people. He explained that the regulatory change is enabling easier access to information across the world: International agreements, effective from 2018, make the exchange of banking information across borders, automatic; Nigeria has signed agreements with a number of nations (US, UK, Canada, UAE, Switzerland, Mauritius, Panama and Bahamas) – all of whom have pledged support and cooperation to exchange information on citizens that is relevant for tax purposes.
Similar schemes in 2016 have been implemented successfull in India, Indonesia and South Africa. VAIDS will bring Nigeria in line with international best practice and contribute to worldwide efforts to tackle corruption. It is believed that the anticipated funds to be raised are at least US$1 billion, which will reduce Nigeria’s borrowing needs, allow investment in vital infrastructure and spur development. According to Minister of Finance Mrs. Kemi Adeosun, “neither can the behaviour of some of our richest citizens and multinationals operating in Nigeria – who seem to consider paying tax to be optional. From 2018, international law will make it easier than ever to track these evaders down and punish them.” “This scheme is in line with similar initiatives launched during 2016 in India, Indonesia and South Africa. We know they work, we know it’s the right thing to do and the Treasury desperately needs the money.” “Finally, the proceeds of this scheme will not disappear. We will provide regular updates on the funds collected to date, and how those funds are being put to very transparent use.