News: FG targets $1bn from new tax scheme

The Federal Government is targeting an estimated revenue of $1bn from the proposed Nigeria Voluntary Asset and Income Declaration Scheme.

The scheme, which takes off on May 1, is meant to offer a window for those who have not complied with extant tax regulations to remedy their positions by the provision of limited amnesty to enable voluntary declaration and payment of liabilities.

The Chairman of the Federal Inland Revenue Service, Mr. Babatunde Fowler, disclosed this on Thursday after a meeting of the National Economic Council presided over by Vice-President Yemi Osinbajo.

Fowler was joined at the press briefing by the Abia State Governor, Okezie Ikpeazu; and the Kaduna State Deputy Governor, Bala Bantex.

He said the underpayment of tax via the use of tax havens and other evasion strategies had not been helpful to Nigeria, saying the practice has been principally perpetrated by multi-national companies and high net worth individuals.

While saying that about 14 million out of the 40 million Nigerians expected to pay tax are not doing so, Fowler noted that Nigeria has the lowest non-oil tax to Gross Domestic Product at six per cent.

He said, “The proposed Nigeria Voluntary Asset and Income Declaration Scheme will capitalise on the considerable international goodwill built by President Buhari in his mission to rebuild Nigeria; and capitalise on the current global movement against tax evasion and illicit financial flows.

“It will offer a window for those who have not complied with extant tax regulations to remedy their position by the provision of limited amnesty to enable voluntary declaration and payment of liabilities.

“The VAIDS scheme targets to increase the tax to GDP ratios to 15% from just 6% by 2020. VAIDS scheme will simultaneously generate revenue and encourage investment and economic activity – as only 214 individuals in the entire country pay N20 million or more in tax annually.”

Fowler said the VAIDS scheme would embrace all federal and sates’ taxes such as Companies Income Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duties, Tertiary Education Tax and Technology Tax.

He added that the scheme is intended to cover all back taxes without any limit to time on how far back a tax assessment can go where a taxpayer has willfully defaulted.

“The scheme is targeted to run from May 1, 2017 for up to six months and incentives will be put in place to encourage early participation. Tax payers will be allowed up to three years to settle their liabilities. Revenue expected from the scheme conservatively estimated at $1bn,” he said.