By Nse Anthony-Uko
ABUJA, (Sundiata Post) – The Federal Government has fixed July 1 for the take-off of a planned tax amnesty that it hopes will rake in US$1 billion in unpaid taxes.
The new tax amnesty is to give tax evaders a chance to make unpaid taxes without any fear of punishment or penalties, the Federal Ministry of Finance said in a release.
The government is hoping the amnesty will boost its income and also bring in more people into the tax net.
Tagged the Voluntary Asset and Income Declaration Scheme (VAIDS) and starting July 1 to December 31, it is being implemented by the Ministry of Finance, and in collaboration with the 36 State Governments and FCT.
“VAIDS will provide a window in which all those – individuals and organisations – who have not complied with extant tax regulations can make amends by taking advantage of the provision of limited amnesty, to enable voluntary declaration and payment of liabilities,” according a statement from the Presidency.
“VAIDS will embrace all Federal and States’ taxes, such as Companies Income Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duties, Tertiary Education Tax, and Technology Tax.
During the Amnesty period, there will be no penalties, interest obligations, and prosecution or audit investigations.
“We expect that all declarations will be complete and honest.”
The finance ministry said a scheme would be launched on June 29. It said tax evaders who delayed participation until after December 31 would be liable for interest on overdue tax balances.
International asset tracers and investigative specialists have been appointed to assist the government in tracing assets held by Nigerians, the ministry said in an emailed statement.
“Anticipated funds to be raised are at least US$1 billion, which will reduce Nigeria’s borrowing needs, allow investment in vital infrastructure and spur development,” said the finance ministry statement.
Explaining the rationale behind the tax amnesty initiative, the Finance Ministry noted that “Nigeria has one of the lowest non-oil tax to GDP ratio in the world, at six percent. Compare this with Ghana (16%), South Africa (27%), and OECD Average (34%).
The Ministry notes that only 214 individuals in Nigeria pay N20 million or more in tax annually, noting that the country continues to greatly suffer the debilitating effects of tax evasion and under-payment.
“Multi-national companies and high net worth individuals use Transfer Pricing and Tax Havens and other sophisticated evasion strategies.
“VAIDS will capitalise on the considerable international goodwill built by President Buhari in his mission to rebuild Nigeria, as well as on the current global movement against tax evasion and illicit financial flows.”
The ministry said in May, that it would increase the interest rate on unpaid taxes to discourage companies and individuals from paying late and racking up a larger debt. The government has previously announced plans to increase a luxury goods tax to 15 per cent from 5 per cent.
- Latest
- Trending
