As the federal government’s Voluntary Assets and Income Disclosure Scheme finally winds up, MARK ITSIBOR takes a look at the life and times of the 9-months tax amnesty programme.
On a scale of double swings – positive and negative, the Federal Ministry of Finance-initiated Voluntary Assets and Income Disclosure Scheme (VAIDS) has (on the positive) arguably achieve the desired remarkable strength in raising the federal government’s tax revenue and voluntary tax remittance by individuals and corporate organizations.
If you ask the minister of finance, Mrs Kemi Adeosun and of the executive chairman of Federal Inland Revenue Service (FIRS), Tunde Fowler, they will, without mincing words open their brag list and point to the compelling success story of the amnesty programme that was formally launched in June, 2017.
VAIDS has emerged to be one of the major policies being used by the federal government to reposition the Nigerian economy and correct inherited underdevelopment. Nigeria has one of the lowest tax collection rates in the world at just 6 percent of Gross Domestic Product (GDP). This was partially a function of the reliance on oil that saw the country abandon the historical revenue collection systems and switch to a culture of sharing resources, rather than generating them.
The objective for introduction of VAIDS is to provide an opportunity for taxpayers, or amnesty for chronic tax defaulters, to voluntarily declare their assets and income and pay taxes due on them and in return obtain some benefits.
Although the federal government won’t be able to achieve the $1billion target of revenue from VAIDS by the June 30th end date for the tax amnesty programme, Adeosun and Fowler obviously have achievements to brag about as far as VAIDS is concerned. Chairman of FIRS, Fowler announced earlier in the month that the total sum of about N30 billion had been recovered from individuals and corporate establishments through the Voluntary Assets and Income Declaration Scheme.
According to him, while the FIRS collected about 90 per cent of this figure, the various states of the federation collected 10 per cent, the FIRS chairman said yesterday in his remarks at a workshop for tax authorities and unveiling of VAIDS certificates to those who partook in the voluntary assets and income declaration in Abuja.
Fowler, who said the scheme has had unquantifiable impact in promoting voluntary compliance since inception last year, added that one of the outcomes of the initiative is its direct impact on growth of the national taxpayers’ database from under 14 million pre 2016 numbers to over 19 million in 2018.
“We are confident that these numbers will translate into a positive growth in Nigeria’s Tax Revenue to GDP ratio when the official percentage for 2017 is released,” he said.
According to him, the National Tax Policy Implementation Committee is also proposing a National Tax Day, a special day to be set aside every year for awareness and sensitization on tax related matters.
Fowler maintained that as part of activities to ensure increased awareness on the Scheme in particular and tax compliance in general, staff of the Joint Tax Board (JTB) secretariat in partnership with the federal ministry of finance will continue to hold weekly Tax Thursday sensitization exercises in the states till the end of the amnesty programme on June 30th. He expressed optimism that the number would translate into a positive growth in the country’s Tax Revenue to GDP ratio.
The FIRS chairman said his team is constantly seeking to preach the message of voluntary compliance to the grassroots through a number of programmes including FIRS.JTB/SMEDAN collaboration aimed bring small business operators into the tax bracket.
The workshop was organised specifically for all the executive chairmen of the States Internal Revenue Service to review activities on implementation of the Scheme thus far for the purpose of strategizing to ensure optimal maximization of its potentials as the final weeks and days of the amnesty programme approach.
Stakeholders’ workshop are being held to dwell on the post-VAIDS environment, identifying the next steps and the role of the critical actors in consolidating on the gains made, with a bid to plan for what happens after the Scheme and how various tax authorities can utilize the information gathered through implementation of the programme.
As noted by the minister of finance, prior to the VAIDS’ advent, many Nigerians lost assets in the course of trying to conceal such assets 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 ownership of assets should be seized as proper declaration allows assets to be legally and formally held by the true owner.
Beyond that verifiable feats of VAIDS, Mrs Adeosun and her performing team have successfully instilled a culture of compliance on the Nigerian tax paying community. At the last count, Nigeria has been able to grow her tax base from 14 million (before VAIDS was introduced) to 19 million. The 5 million taxpayers added to the tax net was majorly driven by VAIDS.
On the flip side, some do not believe that the scheme was well implemented despite the huge success it has recorded, with many pouring out suggestions on the directions and/or best ways to go – post tax. An editorial by one of the national dailies summed up the views of those who have been embroiled in ways to make the post VAIDS era more transparent and productive. The advice to the federal government is that every action taken at the expiration of the extended VAIDS period should be made with a focus to ensuring that the objectives of VAIDS are skillfully and patriotically applied. “No witch-hunting,” that’s the message. The federal government is advised to shun media trials; neither should the tax authorities concentrate on individuals/organisations unallied to the ruling party and the government of the day, as we have seen in the controversial anti-corruption war of the current Federal Government. This is very important in the run-up to another general election that promises to be anything but a smooth contest. What should be given utmost priority is the need for the VAIDS light house to even turn the light on assets of the seaming ‘untouchables” in the country and show objectivity in dealing with those that have cheated the nation of her right revenues.
While the federal government has reiterated that it would prosecute those who fail to take advantage of the amnesty period to declare their tax, the approach has been very pragmatic – “let’s get the first because sometimes you can be in court for years. Our approach is ‘just bring the money first’ and we then pass the case to the investigative authorities to prosecute,” Adeosun said in a recent interview with journalists in Abuja.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from LEADERSHIP Nigeria Newspapers. Contact: [email protected]
NEWS17 hours ago
Why FEC Suspended National Carrier Project
NEWS15 hours ago
PMB Confirms Zainab Ahmed As Minister Of Finance
NEWS11 hours ago
2019: Dankwambo, Turaki Disagree With Wike’s Claim Over APC Sponsorship
NEWS8 hours ago
Ambode’s Fate Hangs In The Balance As GAC Adjourns Sitting
COVER STORIES11 hours ago
Air Nigeria: FG Backtracks, Suspends Planned National Carrier
NEWS23 hours ago
Osun Guber: WAEC Confirms Adeleke’s Certificate
NEWS8 hours ago
Primaries: Forum Frowns At Kebbi APC Consensus Arrangement
NEWS8 hours ago
Fayemi Names 37-member Inauguration Committee