Linus Oota , Lafia Vice President Yemi Osinbajo is expected in Nasarawa State on Tuesday, May 22 on a one-day official visit to assess efforts being made by the state government in peace building. Governor Umaru Tanko Al-Makura confirmed the official visit of the Vice President to the state while speaking to journalists in Lafia….
As the Federal Inland Revenue Service (FIRS) prepares to wind down its tax amnesty programme, the Voluntary Asset and Income Declaration Scheme (VAIDS), its data mining component, has been considered the most effective tool to whip tax dodgers into line.
Just five months into the nine-month schedule, the scheme was said to have yielded close to N17 billion then. Thanks to “the inter-agency cooperation, which provided information from Bank Verification Number (BVN), Nigeria Financial Intelligence Unit (NFIU), state Land Registries, FIRS, the Corporate Affairs Commission (CAC), Securities and Exchange Commission (SEC), the Nigerian Stock Exchange (NSE), Central Bank of Nigeria (CBN), Nigeria Inter-Bank Settlement System (NIBSS), National Identity Management Commission (NIMC) and the Federal Road Safety Commission (FRSC), among others, to create an accurate financial profile of Nigeria’s taxpayers,” says Kemi Adeosun, the Finance Minister.
By this, and the Automatic Exchange of Financial Account Information (AEFAI) with other countries, Adeosun explained that the government now has the data on individuals and companies that are owing taxes.
She then advised offshore asset owners to utilise the VAIDS window to regularise their taxes before March 31, the end of the amnesty programme.
“The offshore tax shelter system is basically over. Those who have hidden money overseas are being exposed and, while Nigerians can legally keep their money anywhere in the world, they must first pay any taxes due to the Nigerian government so that we can fund the needs of the masses and create jobs and wealth for our people,” she said.
Given the success of the programme so far, Adeosun stated: “We have had very good responses from companies. So far, we have received $110 million from just two companies. One of them paid a liability of $55 million, while the other paid $44 million. Let me give you an example. We asked the Office of the Accountant General to send us the data of every payment over N100 million in the last five years. We then checked FIRS for the data on taxes they paid. These government contractors had declared less than the amount the government actually paid them. This does not even include their other income streams, which would have included the transactions they had done with the bank and personally. This was business with the government, yet they weren’t declaring their income aptly.”
Babatunde Fowler, the FIRS Chairman, on his part, said VAIDS has generated N16.9 billion at the federal level alone as at the end of 2017.
VAIDS, which started last July with nine-month grace period, is a type of voluntary disclosure programme with the objective of giving a window to non-compliant taxpayers to regularise their tax position in form of registration, returns and remittance.
The scheme gives a once in a life time opportunity to taxpayers to fully and honestly declare all their assets and incomes from all sources, which had previously not been exposed to tax authorities, and to pay the tax due on those assets and incomes.
Giving reasons why the Federal Government came up with the scheme, a VAIDS consultant, Mr. Niyi Adebayo, said the country’s tax-to-GDP ratio is about the lowest in the world. Nigeria’s tax to GDP ratio is just six per cent, while Ghana and South Africa are at 15 per cent and 24 per cent respectively.
Hear him: “Of 70 million economically active Nigerians, less that 10 per cent are on the Pay-As-You-Earn (PAYE) scheme and 96 per cent of this have their taxes deducted at source. Only 214 Nigerians pay N20 million or more in taxes annually, and all of them are based in Lagos. At 21 per cent PAYE, this implies that only 214 Nigerians earn above 95.238 million annually. Fewer than 1,000 pay N10 million or more in taxes; all but two are based in Lagos also. The numbers do not lie; people are not paying taxes.”
Adebayo blamed this low tax compliance level on the elusive harmonisation of data of corporate and personal entities between various government agencies.
“There is a lack of an industry and agency wide intelligence on financial and economic activities of taxpayers and potential taxpayers, which has inhibited the efforts to drive an effective tax compliance regime. There are multiple silos of data sited in multiple data centres across the country under the stewardship of several Ministries, Departments and Agencies (MDAs). “Because of the lack of substantive collaboration, authenticity, integrity and accuracy of data cannot be properly achieved. However, with the current data harmonisation initiative sponsored by the Vice President’s office, we can see the spotlight, though far, but visible. NIMC has 24 million registered persons on its database, while it has received 9.3 million BVNs from NIBSS, of which there is a 40 per cent match to its existing records. NIMC has begun direct integration with several key data points like INEC, immigration and NCC, among others.”
Adebayo added that this has led to the identification of potential taxpayers through assets and income; process the taxpayers’ information and issue a bill. “As a result of this, taxpayer have been normalised and become part of the taxpaying society,” he said.
As VAIDS closes on March 31, Adeosun has reitrated the Federal Government’s resolve to name and shame tax defaulters.
She said the Federal Government has the political will to prosecute tax evaders once the tax amnesty programme is over. She urged the people to take advantage of the scheme and regularise their tax payments.
Her words: “The Federal Government has the political will and data to go after tax evaders who fail to take advantage of the tax amnesty programme. Many Nigerians cannot explain their lifestyles or match their lifestyles, assets and income with their tax payment. We will close VAIDS at the expiration of the programme on March 31, 2018. And once the programme is closed, we will name and shame and also prosecute tax evaders since they refused to take advantage of the opportunity,” she said.