Osinbajo signs new Executive Order to back tax amnesty

by Onyinye Nwachukwu & Elizabeth Archibong

June 29, 2017 | 4:36 pm
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Acting President Yemi Osinbajo yesterday signed an Executive Order that would encourage citizens to voluntarily come forward and pay tax arrears without being forced.
Osinbajo signed the order immediately after officially launching government’s tax amnesty programme tagged – Voluntary Assets and Income Declaration Scheme (VAIDS), which seeks to boost the country’s very low tax base and raise much needed revenues.
VAIDS is a time-limited opportunity for taxpayers to regularise their tax status relating to previous tax periods and targets at least an additional 4 million new taxpayers to the database. The scheme will run for eight months, beginning July 1 to March 31, 2017, authorities say.
In exchange for fully and honestly declaring previously undisclosed assets and income, tax payers will benefit from forgiveness of overdue interest and penalties, and the assurance that they will not face criminal prosecution for tax offences or be subject to tax investigations.
Nigeria has made considerable progress in its tax administration by taxing those in formal employment, self-employed persons and professionals. But some companies and individuals are able to evade full tax payment due to the inability of the tax authorities to access and assess their true income and thereby tax them accurately.
Nigeria’s tax to GDP ratio is still quite low at just 6 percent, and is one of the lowest in the world (compared to India’s 16%, Ghana’s 15.9%, and South Africa’s 27 %). Most developed nations have tax to GDP ratios of between 32 percent and 35 percent ratio.
Taxpayers are only about 14 million out of the country’s over 70 million economically active population.
Launching the new scheme at the State House Conference Centre, Abuja, the acting President raised the concerns that even Nigeria’s highest income net-worth individuals who ought to shoulder the greatest proportion of the tax burden evade tax payment. 
Quoting available data, Osinbajo said only 214 Nigerians pay taxes of N20 million and above per annum and that all of them were based in Lagos State.
He warned that tax evasion was not just a civil offence but criminal.
He, however, raised the hope that the new scheme ushers in an opportunity to increase the nation’s general tax awareness and compliance, saying every Thursdays would now be tax days to push awareness and encourage enrolment.
In her remarks at the launch, the minister of finance, Kemi Adeosun, said the tax amnesty scheme was a test for Nigerians and if “we pass this” Nigeria’ future would be assured.
John Owan Enoh, a senator, who represented the Senate President, noted that since Nigeria could not hold or control its other sources of revenue it had to take a firm grasp of its non-oil revenue generating sector, vis-à-vis the tax regime, saying, “the National Assembly supports the bold move of the VAIDS scheme.”


Onyinye Nwachukwu & Elizabeth Archibong

by Onyinye Nwachukwu & Elizabeth Archibong

June 29, 2017 | 4:36 pm
  |     |     |   Start Conversation

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