Thursday, 29 June 2017

Osinbajo gives tax payers get nine months to regularise tax status

Acting President Yemi Osinbajo has granted tax payers nine months grace to regularise their tax status or face prosecution.
He made this declaration Thursday in Abuja at the launch of the Voluntary Assets and Income Declaration Scheme (VAIDs).
The grace period will be observed from July 1, 2017 to 31, March, 2018.
Osinbajo said  “ the scheme is specially targeted at taxpayers who have not been fully declaring their taxable income and assets, those who don’t pay at all and those who have been underpaying or under remitting.
The scheme would cover all federal and state taxes such as companies income tax, personal income tax, petroleum profit tax, capital gains tax, stamp duties and tertiary education tax.”

He added that “it will be supported by an executive order, which I will sign into law today, to offer a once in a life time opportunity to those in default to regularise their tax affairs. In exchange for full and honest declaration, tax evaders will receive immunity from prosecution, forgiveness of penalty and interest that is due on unpaid taxes.”
The Acting President noted that “tax payers will also get the full assurance that all information provided will remain confidential. In addition, participants in the scheme will not be selected for audit investigation for the period cover.”
Also the federal government he said understands “that some tax payers may have problems raising cash and for that reason, we have built in a system that will allow those owing to pay over a period of time, subject to conditions.”
However, those who fail to take advantage of the nine month grace period, would face criminal investigation and if found guilty might face up to five-year jail time.
Osinbajo said that the government would commence a nationwide the sensitisation of the scheme and tax in general to ensure compliance, noting that “to this end, we have agreed that every Thursday starting form today and for the next one year, will be declared Tax Thursday.”
The Acting President said government “expects the FIRS and every state government to organise sensitisation events that would raise awareness of the tax system and will result in massive enrollment of new tax payers. We must enroll at least 4 million tax payers and increase the level of payment among the 14 million already registered tax payers. We expect that all state governors will personally lead this initiative and support the work of the 7500 Community Tax Liaison Officers that would be employed shortly.”
On the international front, Osinbajo said “Nigeria is now party to the Authomatic exchange of information which comes into effect in January, 2018. This means that Nigeria will automatically have all the information to successfully pursue tax evaders across the world. Specifically, we will have information on beneficial owners of assets held abroad, including those in tax havens”.
Speaking at the event the Minister of Finance, Mrs Kemi Adeosun said that with the scheme, Nigeria hopes to increase tax to GDP of the country from 6 per cent to 30 per cent. “If we pass this test, the future of Nigeria is assured,” she said.
A recent report of the Joint Tax Board, revealed that only 14 million people out of the estimated 69.9 million Nigerians, who are economically active, pay tax.

According to the report, “96 per cent of the 14 million, have their taxes deducted at source, meaning they are government workers. Only 214 Nigerians pay taxes of about N20 million annually and about 900 Nigerians pay N10 million as tax every year” the report disclosed.

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