The Federal Government has given tax defaulters up to March 31 to regularise their tax status under the Voluntary Assets and Income Declaration Scheme (VAIDS) or face prosecution. The Minister of Finance, Mrs. Kemi Adeosun, who disclosed this in Abuja, last week, said that the government would establish special courts to prosecute the tax offenders, comprising high net worth persons and corporate organisations.
It is believed that government’s new initiative on tax evaders will stop tax leakages and shore up the country’s revenue base.
Therefore, effective from April 1, 2018, special tax courts will be established to fast track the adjudication of tax-related offences under the VAIDS introduced on June 29, 2017. The VAIDS is designed to shore up government non-oil revenue by growing the tax base and ensuring tax compliance. The prosecution will involve tax defaulters who failed to take advantage of the nine-month amnesty window provided by the VAIDS.
Already, government has identified not less than 130, 000 high-profile tax evaders. The VAIDS is a time-limited opportunity for taxpayers to regularise their tax status relating to previous tax periods and pay any tax due. And in exchange for fully and honestly declaring past undisclosed assets and income, taxpayers will benefit from forgiveness of overdue interest and penalties, and the assurance that they do not face criminal prosecution for tax offences or tax investigations.
According to the Finance Minister, the special courts have become necessary because of the seeming slow nature of our judicial system and the need to fast track the adjudication of tax-related offences under the VAIDS initiative. Under the scheme, all incomes, assets, and other properties earned and acquired from 2010 to date will be declared and appropriate tax paid on them.
We lend our support to every good plan that will drive the effective implementation of the government’s tax policy. But, such policy must be in line with extant laws and all guidelines between banks and their customers. Interestingly, the minister has explained that VAIDS is covered by the existing tax laws in the country.
It is, indeed, disheartening that high net worth individuals and some corporate organisations do not pay commensurate taxes after posting astonishing profits. This is often done in collusion with some tax officials. The planned special courts may seem drastic, but it is one of the measures that can redress Nigeria’s present low tax ratio to the Gross Domestic Product (GDP), which at 6 percent is one of the lowest in the world. This obtains because of low tax compliance among high net worth individuals and a large informal sector that do not pay tax. If the initiative is successfully implemented, it will improve the current low tax to GDP ratio from the present level to between 12 and 15 percent.
SOURCE: THE SUN