Lagos, 13 July, 2017: Leading Professional Services firm, PwC Nigeria recently hosted an interactive session for Executives and Business owners on the “Voluntary Assets and Income Declaration Scheme” (VAIDS) introduced by the federal government of Nigeria in collaboration with all 36 states governments.
The event which held at the Grand Ballroom of the Oriental Hotel, Victoria Island, Lagos had in attendance the Honourable Minister of Finance, Mrs. Kemi Adeosun who delivered a keynote speech, the Executive Chairman of the Federal Inland Revenue Service, Mr Tunde Fowler, the Chairman of the Lagos Internal Revenue Service, Ayodele Subair and many top level executives, regulators and entrepreneurs.
While most developing countries have tax to GDP ratios above 20%, Nigeria still records a global low of 6%. The Federal Ministry of Finance, in a bid to address this, set up the Voluntary Assets and Income Declaration Scheme (VAIDS) in collaboration with all 36 states of the federation. The scheme was officially launched by the Acting President of the Federal Republic of Nigeria, Prof. Yemi Osinbajo, SAN, GCON on 29 June 2017 supported by an Executive Order.
The main objective of VAIDS is to increase the number of taxpayers in the tax net and raise revenue for government. Specifically, it is expected to increase Nigeria’s tax to GDP ratio from the current 6% to between 10% and 15%, broaden the national tax base, curb tax evasion and discourage illicit financial flows. In addition it is expected to improve good governance, guarantee a better quality of life, encourage robust national planning and increase the size of the formal economy.
The Finance Minister, Mrs Kemi Adeosun stated that at 6%, Nigeria’s tax compliance rate was low whilst most developed nations were at 30-32%. “Prosperous nations have high levels of tax compliance whilst poor nations have low rates. Nigeria aspires to be a prosperous nation, so this problem must be solved.”
The Scheme which commenced on 1 July 2017 will last for a period of 9 months and will be implemented by the Federal Inland Revenue Service (FIRS) in collaboration with all 36 State Internal Revenue Services and the FCT IRS.
Taxpayers who make full and honest declarations will enjoy waiver of interest and penalty, immunity from prosecution, confidentiality of information supplied, exemption from tax audits for the periods covered by the disclosure and flexible payment of tax due. While taxpayers who fail to participate in the Scheme will be investigated and if found culpable will be subject to criminal prosecution.
Also commenting Mr. Ayo Subair, Executive Chairman, LIRS said: “We have seen the positive impact taxpayers’ money can make at the state level in terms of social services, administration of government and infrastructure development. So we are fully supportive of this initiative and we are ready to assist as many taxpayers who would like to take advantage of the Scheme to remediate their tax affairs,”
According to Taiwo Oyedele, Head of Tax at PwC Nigeria, “Paying taxes is not particularly easy anywhere in the world for anyone who has expended time, energy and other resources to earn the income. However, it is necessary for there to be an organised society for the benefit of all. We organised this session to discuss the background, design and structure of the Voluntary Assets and Income Declaration Scheme (VAIDS), key objectives, legal framework and the step-by-step process for declaration, remediation and resolution. We also highlighted the benefits and assurances available under VAIDS and post-implementation enforcement and sanctions”.
Earlier in his welcome address at the session, Uyi Akpata, Country Senior Partner, PwC Nigeria said: “This session and indeed the renewed interest and policy direction on taxation by this administration is a positive development for the transformation of our economy. At PwC, we have consistently made the point that reliance on oil as the main source of government revenue was not sustainable and that other forms of revenue generation such as taxation must be explored for Nigeria to build a truly viable economy and reach all of its potential. On taxation, we have over time advocated various initiatives to broaden the tax base, reform the tax laws, and improve the ease of paying taxes so we are happy that some of these ideas are beginning to take life.”