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12 Mar 4:14pm
Nigeria launched the Voluntary Assets and Income Declaration Scheme (VAIDS) effective 1 July 2017 by Executive Order No. 4 of 29 June 2017 to give defaulting tax payers the opportunity to make up their outstanding tax obligations from 2011 to 2016 in return for waiver of penalty and interest and criminal prosecution. ”Great Economies and Great Nations, Prosperity and Abundance of Nations and Communities are Created by Men not Spirits.” - Vice President, Federal Republic of Nigeria Prof. Yemi Osinbajo SAN GCON • All tiers of Government Require Revenue to Provide Infrastructure for Sustainable Growth • Oil being the Major Source of Revenue in the Past • Need for Diversification of the Economy and Growth of Non-Oil Tax Revenue • Private Sector Significantly Drives the Economy • Linkage between Voluntary Tax Compliance and Economic Growth/Development What is VAIDS? VAIDS is an acronym for Voluntary Assets and Income Declaration Scheme. It is a project initiated by the Federal Government of Nigeria which is aimed at providing an opportunity for corporate and individuals to regularize their tax status relating to previous tax periods. Under the scheme, taxpayers were given the opportunity to benefit from total waiver of outstanding and overdue interests and penalties. They also stand to be the beneficiaries of the assurance that they will not face criminal prosecution for tax offences or be subjected to further tax investigations. To profit from the scheme, taxpayers will be required to fully and honestly declare previously undisclosed assets and income. In addition to raising tax revenue for the period of its operation, VAIDS will provide an opportunity to increase general tax awareness and compliance among the general public. Important things to know about VAIDS 1. It is a time limited opportunity. 2. ALL taxes (Federal and State) are Covered 3. Up to three (3) Years Instalment Plan subject to agreement with Revenue Authority Why VAIDS? The key motivation for introducing the scheme is that in spite of the fact that Nigeria has some of the most profitable and well capitalized companies in Africa, the tax remittance rate is still low. Nigeria’s low tax revenues are inconsistent with the lifestyles and spending habits of a large number of citizens. Many are engaged in transfer of assets overseas, use of offshore companies in tax havens and registration of assets in nominee names. Tax evasion is a significant challenge. Some of the ways in which it is perpetrated are: • Manipulation of accounting records • Use of complex structures for transactions • Non registration for VAT and non remittance after charging • Non payment of CGT on assets disposal • Escaping detection of income due to lack of machinery for tracing such According to the Joint Tax Board, there were only 14 million taxpayers in Nigeria as at May 2017, compared to an estimated 69.9 million economically active people while our tax to GDP ratio is rather poor at 6%     12 Mar 4:14pm
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