Taxes

UK’s Unexplained Wealth Orders triggers calls for extension of VAIDS deadline

by Iheanyi Nwachukwu

February 14, 2018 | 1:57 am
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Nigerians in the United Kingdom (UK) are pushing for extension of the deadline of ongoing Voluntary Asset and Income Declaration Scheme (VAIDS).

Since Wednesday January 31, 2018, the UK law enforcement has a new weapon in its armory – Unexplained Wealth Orders (UWOs) which requires those that hold property to explain the origin of assets.

UWO applies to any property with a value greater than £50,000 (N25million).   The Unexplained Wealth Orders   requires foreign owners of property in the country to explain the source of their funds or risk forfeiting them to the government.

Information at the VAIDS Office in the Federal Ministry of Finance revealed that many Nigerians who own property in the UK have under-paid their taxes before transferring funds overseas to buy them.

UK’s Unexplained Wealth Order is designed to confiscate the proceeds of crime by using civil powers instead of criminal powers.

The power was introduced by section 1 of the Criminal Finances Act 2017. This recent orders by UK government has created anxiety among Nigerians at home and abroad who own property in that country.

There are revelations that the confidential hotlines of the Federal Ministry of Finance confidential hotlines that were provided for booking of appointments has in the past three days recorded increased traffic with most callers requesting  for extension of time to complete their VAIDS declaration forms.

The Scheme which is a nine-month tax amnesty given to every Nigerian especially the high net worth individuals (HNIs) covers the whole array of taxes and gives Nigerians the opportunity to regularize their tax affairs.

Nigeria’s tax-to-Gross Domestic Product (GDP) ratio at just 6percent is one of the lowest in the world compared to India (16percent), Ghana (15.9percent), and South Africa (27percent). Most developed nations have tax-to-GDP ratios of between 32percent and 35percent.

Not only that Nigeria’s 6 percent tax-to-GDP ratio is low, it is due to low tax compliance among high net-worth individuals and a large informal sector.

In line with Federal Government of Nigeria’s ambitious plans increase spend on infrastructure development, the Federal Inland Revenue Service (FIRS) and the tax authorities of the 36 states under Joint Tax Board (JTB) launched the Voluntary Assets and Income Declaration Scheme (VAIDS) in June.

Currently, those taking advantage of VAIDS by declaring honestly and fully are being freed from prosecution even as they qualify for the pardon for penalties and interest.

Another benefit of participating in the Scheme is that tax payers are allowed to transfer assets previously held by their nominees into their own name.

VAIDS enables taxable Nigerians to declare their assets and incomes and get certain waivers, including penalties and interest payments.

VAIDS, which took-off on July 1, 2017 is expected to last for nine months after its with deadline on March 31, 2018.

Iheanyi Nwachukwu


by Iheanyi Nwachukwu

February 14, 2018 | 1:57 am
  |     |     |   Start Conversation

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