The Federal Government said it is targeting an estimated revenue of $1 billion from the proposed Nigeria Voluntary Asset and Income Declaration Scheme (VAIDS).
The scheme takes off on May 1 for up to six months and will offer a window for those who, before now, 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 scheme will also have incentives in place to encourage early participation. Under the scheme, taxpayers will be allowed up to three years to settle their liabilities.
The National Economic Council (NEC) approved the scheme following a briefing by the Minister of Finance, Kemi Adesoun, at the meeting where she stated that the underpayment of tax via the use of tax havens and other evasion strategies, have not been helpful to Nigeria.
The Chairman of the Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler, who disclosed this to State House correspondents at the post-NEC briefing said the FIRS was targeting an increase in tax contribution to the Gross Domestic Product (GDP) to 18 per cent by 2020.
He said this will be done through a VAIDS approved by NEC on Thursday. The scheme is expected to 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.
He said, “VAIDS scheme targets to increase the tax to GDP ratios to 18 per cent from just six per cent by 2020,” adding that the FIRS can surpass NEC’s projected 15 per cent.
The FIRS boss said only 14 million Nigerians out of 40 million eligible taxpayers currently pay tax. Fowler said a conservative revenue of $1 billion is expected to be generated from the scheme, adding that the VAIDS will embrace all federal and states’ taxes including companies income tax, personal income tax, petroleum profits tax, capital gains tax, stamp duties, tertiary education tax and technology tax.
“It is anticipated that at least 50 per cent of the funds recovered will belong to states that are the ultimate collectors of personal income taxes. A Memorandum of Understanding (MoU) will be gazetted and signed with each state government,” Fowler, who briefed alongside the Abia State Governor, Okezie Ikpeazu, and Kaduna State Deputy Governor, Bala Bantex, said.
According to him, under-payment of tax has been principally perpetrated by multinational companies and high net worth individuals, keeping Nigeria as a country with the lowest non-oil tax to GDP at six per cent.
“The proposed VAIDS will capitalise on the international goodwill built by President Muhammadu Buhari in his mission to rebuild Nigeria,” he said.
The scheme is also expected to capitalise on the current global movement against tax evasion and illicit financial flows and 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.
Adeosun also reported to council that the balance in the Excess Crude Account (ECA) as at March 15, 2017 stood at $2,45,864,724.59, recording a marginal increase of $2,458,382,882.03.
The ECA balance does not reflect the decision of council last month to deduct $250 million for injection into the Sovereign Wealth Fund (SWF).
She also briefed the council on the Stabilisation Fund Account (SFA), an account which is equivalent to 0.5 per cent of the Federation Account.
The Finance Minister informed council that the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) recently approved for disbursement (N39,613,282,870.69) to a number of states, stating that the stabilisation fund now stands at N25,793,400,290.
Council also deliberated on the need to accelerate and review the extant National Forest Policy as well as ensure its backing through the enactment of relevant forest laws.
Ikpeazu said council recommended massive afforestation/reforestation of degraded forests and landscape outside forests and the establishment of take-off of the National Forestry Trust Fund through contributions by wood products exporters according to products classification (totally processed, semi-processed, charcoal), among others.
It also recommended the establishment of National Forest Model Estate in all the states and FCT, improvement in forest governance and establishment of national task force to effectively protect the forest estate/reserve as well as effective monitoring, evaluation, documentation of trade in wood and wood products.
This is as council members plan an extraordinary session to discuss security matters especially as it relates to the economy.
Bantex told newsmen that the decision to hold the session came following a briefing from the National Security Adviser (NSA), Babagana Mongonu, on the security situation in the country with particular reference to Boko Haram insurgency in the North-east, cattle rustling, ethnic militias/security outfits, kidnapping, armed robbery, militancy in the Niger Delta and proliferation of small arms across the country. The NSA fingered unemployment as the major threat to security.
(Source: The Sun)