There is currently a systemic breakdown of compliance with the tax system with various strategies used by citizens to evade tax obligations, the Minister of Finance, Mrs. Kemi Adeosun, has said.
She said the country’s low tax revenues were at variance with the lifestyles of a large number of the citizens and with the value of assets known to be owned by Nigerians resident all over the world.
Some of the strategies being devised by some Nigerians to evade tax, according to her, include transfer of assets overseas, use of offshore companies in tax havens to secure assets, and the registration of assets in nominee names.
She said this in a statement while commenting on the newly launched Voluntary Asset and Income Declaration Scheme.
The VAIDS was put in place for defaulting taxpayers to work out a flexible way to pay their outstanding tax liabilities relating to the last six relevant tax years, regularise their transactions and obtain genuine tax clearance certificates for all the relevant years without fear of criminal prosecution for tax offences and with the benefit of forgiveness of interest and penalties.
The scheme offers a nine-month window to allow Nigerians, who may have evaded tax, whether ignorantly or deliberately, in the past six years, the opportunity to do their civic duty and pay the correct taxes, thereby avoiding criminal prosecution at the expiration of the scheme.
It embraces all federal and state taxes such as Companies Income Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duties, Tertiary Education Tax, Technology Tax, tenement rates, and property taxes. It also covers all back taxes for the last six years in line with the statutory periods of limitation under the relevant tax statutes.
Adeosun stated, “The Voluntary Asset and Income Declaration Scheme is specifically targeted at taxpayers who have not been fully declaring their taxable income/assets; have not been paying the taxes due at all; have been underpaying or under remitting; are under a process of tax audits or investigations with the relevant tax authority; are engaged in tax disputes with the relevant tax authorities but are prepared to settle the tax dispute out of court; are new taxpayers who are yet to register with the tax authorities; and are existing registered taxpayers who have new disclosures to make.
“It does not matter whether the relevant tax default arose from undeclared assets within or outside the country. If tax should have been paid, the Voluntary Asset and Income Declaration Scheme is providing a once in a lifetime opportunity to declare the tax outstanding and resolve it definitively.”
