The Executive Chairman of the Federal Inland Revenue Service (FIRS) Mr. Babatunde Fowler, has disclosed that only N20 billion is generated so far out of the targeted N305 billion from the implementation of Voluntary Asset Income Declaration Scheme (VAIDS).
He gave the hint during an interactive session with journalists at the February 2018 Members’ Evening of the Institute of Directors (IoD) in Nigeria in Lagos, where he delivered a paper on the scheme as the guest speaker.
The seasoned tax administrator pointed out that VAIDS presented the fiscal opportunity for the country to improve and widen its tax net and by so doing, improve the tax to GDP ratio from the current low rate of 6 percent.
Sharing his experience from the just concluded the UN,OECD forum he attended in New York, USA, the FIRS’ boss puts the sustainable Tax to GDP ratio for any economy at 15 percent, noting thar through the VAIDS and other tax initiatives being undertaken by the government, Nigeria’s soon to be released Tax to GDP ratio reflected a modest improvement.
On the revenue generation drive, Fowler explained that with about N4.30 trillion generated last year up from N3.3 trillion recorded in 2016, the potential to meet the N6.3 trillion target in the current fiscal year as proposed in the Appropriation Bill remained bright.
According to him, with the recent signing of critical multilateral agreements on the “Automatic Exchange of Information for Tax purposes” by the Nigerian government, individual and corporate tax evaders would have no option than to comply with the tax provisions in order to avoid heavy sanctions.
Fowler urged the IOD members to become the nation’s “Tax Ambassadors” by ensuring compliance by their enterprises and also supporting the current awareness and sensitization campaigns on the VAIDS.
In his opening speech, the IOD’s President, Alhaji Ahmed Mohammed, said that VAIDS was a timely initiative given its potential to address the low tax compliance rate in the country.
Mohammed, while raising concerns over the low impact of the VAIDS campaign, advocated the extension of the compliance deadline beyond the March 31, 2018 earlier set by government.
Speaking from the practitioner’s perspective, Head, Tax and Regulatory, KPMG Nigeria, Mr. Wole Obayomi, noted the “VAIDS” was an opportunity by the government to reduce compliant taxpayers’ burden.
According to him, the scheme covered a broad range of taxes including, personal income tax, petroleum profit tax, property tax, value added tax, education tax, withholding tax, capital gains tax and stamp duties.
The VAIDS is a nine- month Federal Government window spanning July, 2017 through March 31, 2018 given to taxpayers to regularize their tax status relating to previous tax periods and pay any taxes due without attracting sanctions.
Under the scheme, the tax period in review is between 2011-2016 and in exchange for fully and honestly declaring previously undisclosed assets and income, tax payers will benefit from government’s complete waivers of overdue interest and penalties, and the assurance they do not face criminal prosecution for tax offences or tax investigations.
