The Federal Government and some foreign countries, including the United Kingdom Government, have commenced the Automatic Exchange of Tax Information (AETI), particularly on overseas assets held by Nigerians.
The Minister of Finance, Mrs. Kemi Adeosun, confirmed this on Friday in Abuja during the presentation of Progress Report on Tax Laws Reform by the Vice Chairman of the National Tax Policy Implementation Committee, Mr. Taiwo Oyedele.
The Special Adviser on Media and Communications to Finance Minister, Oluyinka Akintunde, stated that the Minister expressed satisfaction with the data being supplied to Nigeria by foreign countries under the AETI, to which the country became a party last month.
Adeosun, while responding to questions raised by journalists during the submission of progress report on tax laws reform, quoted as saying that “the data received in Nigeria with regard to overseas assets held by Nigerians has been impressive and will underpin a long term improvement in the nation’s tax to Gross Domestic Product (GDP) ration, in turn, will improve life for the masses.
“The data on bank accounts, property and trusts, which has come automatically from a number of countries is being used to support the Voluntary Assets and Income Declaration Scheme (VAIDS) by allowing the tax authorities to check the accuracy of declarations received.
“The Federal Government is also using the data to generate ‘nudge’ letters which are being sent to those identified as being potential tax defaulters”, the Minister added.
She disclosed further that Nigeria had written to a number of nations to request specific information about offshore trusts and bank accounts held by its citizens and advised users of offshore structures to take advantage of VAIDS to regularise their taxes before the expiry of the amnesty programme.
The minister stated further: “The offshore tax shelter system is basically over. Those who have hidden money overseas are being exposed and whilst 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.
“The moral argument against illicit financial flows and tax evasion and the strong international co-operation are such that every Nigerian tax payer should do the right thing. The needs of our people for development override any other argument against payment of tax,” she added.
According to her, the need for sustainable revenue that could deliver infrastructure development for the countey and improve its tax to GDP ratio cannot be over-emphasised.
The minister assured also that the Federal Government would build a robust tax system and implement the recommendations by the National Tax Policy Implementation Committee (NTPIC) on tax laws reform.
Earlier in the address, the NTPIC Vice Chairman, Mr. Taiwo Oyedele, said that the Committee considered three major policy documents namely; the Economic Recovery and Growth Plan (ERGP), the National Tax Policy and Ease of Doing Business Plan.
He disclosed that the Committee agreed that tax reforms should align with overall government objectives as articulated in these documents, such that every action or recommendations would promote and catalyse the realisation of overall objectives.
According to him, the Committee identified seven major tax areas that would have the highest impact on the economy and sustainable development of the country.
He listed the areas as Company Income Tax (CIT), Value Added Tax (VAT), Customs & Excise Tariff (CET), Personal Income Tax (PIT), Pension Contributions, Industrial Development Income Tax Relief (IDITR); and Tertiary Education Trust Fund
The tax expert explained that he proposed changes to the tax laws would achieve some specific objectives namely, increase and diversify government revenue, simplify paying taxes and doing business, promote micro, small and medium enterprises, protect most vulnerable persons in the society, and remove obsolete, ambiguous and contradictory provisions in the law.
Oyedele disclosed that the Committee’s work resulted in two executive orders and five amendment bills. The Executive Orders are the Value Added Tax Act (Modification) Order and Review of Goods Liable to Excise Duties and Applicable Rate Order.
He listed the proposed tax amendment bills as the Companies Income Tax Act (Amendment) Bill, Value Added Tax Act (Amendment) Bill, Customs, Exercise, Tariff (Consolidation) Act (Amendment) Bill, Personal Income Tax Act (Amendment) Bill and Industrial Development (Income Tax Relief) Act (Amendment) Bill.