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Budget: FG to aggressively pursue tax evaders

The 2018 budget submitted to the National Assembly on Wednesday by President Muhammadu Buhari, projects non-oil revenues of N4.17 trillion to fund part of the…

The 2018 budget submitted to the National Assembly on Wednesday by President Muhammadu Buhari, projects non-oil revenues of N4.17 trillion to fund part of the budget amounting to N8.61 trillion.

The forecasted non-oil revenue for 2018 is three times the value last year and revenues from tax collections are expected to rise following innovations being introduced by the government.

The federal government is using the carrot and stick approach to make companies and individuals pay their taxes to fund the budget.

The government recently launched the Voluntary Assets and Income Declaration Scheme (VAIDS) for individuals and companies to regularise their tax status where necessary.

The scheme is expected to last for nine months only from 1st July 2017 to 31st March 2018 and is divided into two phases.

In the first phase, companies and persons that comply with VAIDS between July 1 and December 31 2017 will also pay the accumulated liability without interest and penalty while those who comply between July 1 and March 31, 2018 will pay only the liability and the interest without penalty.

However, companies and persons who fail to take advantage of the VAIDS period will pay the liabilities, interest and still face the penalty. 

Under Nigerian laws, tax evasion is a crime punishable, upon conviction, by imprisonment of up to 5 years, while the taxpayer will still be required to pay the tax due along with the associated interest and penalties. 

Typically, a penalty of 10 per cent of the tax due is assessed, along with related interest charges that accrue at 21 per cent per annum, started from the due date of the related tax charge while in some cases the penalty assessed is 100 per cent of the tax due.

The minister of finance, Kemi Adeosun said on Tuesday, “VAIDS ushers in an opportunity to increase the nation’s general tax awareness and compliance. It is a time-limited opportunity for taxpayers to regularise their tax status relating to previous tax periods.

Nigeria has high rate of tax evasion as shown in the Joint Tax Board (JTB) data and its tax to GDP ratio, at just 6 per cent, is one of the lowest in the world compared to India’s of 16 per cent, Ghana’s of 15.9 per cent, and South Africa’s of 27 per cent. 

 

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