FG targets $1bn revenue from new scheme
Nigeria is targeting $1bn additional revenue as Finance Minister Kemi Adeosun Thursday presented to the National Economic Council (NEC), the Nigeria Voluntary Asset and Income Declaration Scheme (VAIDS).
Addressing State House correspondents after the meeting chaired by Vice President Yemi Osinbajo, the chairman of the Federal Inland Revenue Service, Babatunde Fowler, said the revenue expected from the scheme was “conservatively” estimated at $1 billion.
Fowler explained that the underpayment of tax via the use of tax havens and other evasion strategies had not been helpful to Nigeria, saying this practice had been principally perpetrated by multi-national companies and high net worth individuals.
The FIRS chairman noted that the country had the lowest non-oil tax to Gross Domestic Product at 6 percent.
He said the proposed scheme would capitalise on the considerable international goodwill built by President Muhammadu Buhari in his mission to rebuild Nigeria as well as on the current global movement against tax evasion and illicit financial flows.
He said the scheme would offer a window for those who had not complied with extant
tax regulations to remedy their position by the provision of limited amnesty to
enable voluntary declaration and payment of liabilities.
Fowler also stated that the scheme targeted to increase the tax to GDP ratios to 15
percent from just 6 percent by 2020.
He said the scheme would 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 the scheme would embrace all federal and states’ taxes such as Companies Income Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duties, Tertiary Education Tax and Technology Tax.
The scheme, he said, was intended to cover all back taxes without any limit to time on how far back a tax assessment could go where a taxpayer had wilfully defaulted.
The scheme, according to him, is targeted to run from May 1, 2017 for up to six months; while incentives will be put in place to encourage early participation.
Fowler said tax payers would be allowed up to three years to settle their liabilities.