The Federal Government will deploy and heavily rely on technology to increase tax compliance under the recently launched Voluntary Asset and Income Declaration Scheme (VAIDS). Minister of Finance, Mrs. Kemi Adeosun has said.
In an interview on Channels Television, the Minister explained that the signing of an Executive Order by the Acting President, Professor Yemi Osinbajo on Assets Declaration, underlines the seriousness attached to the scheme, which would be vigorously implemented.
The Minister stated that at 6%, Nigeria’s tax compliance rate was low whilst most developed nations were at 30-32%. “Prosperous nations have high levels of tax compliance whilst poor nations have low rates. Nigeria aspires to be a prosperous nation, so this problem must be solved.”
The Minister revealed that the Government had deployed data mining to compile data on thousands of tax payers, which showed the level of non-compliance and tax evasion. Citing BVN, land registry and other sources within Nigeria as well as data from foreign Governments. She also detailed the work of an international asset tracing firm as a source of overseas data. “Technology has been key in enabling us to build an accurate financial profile for Nigerians and based on the information we gathered, we saw that the level of non-compliance was very high and we knew we had to do something about it. In the past, tracking true income and assets would have been difficult but now, it is at the touch of a button”.
The Minister revealed that further information would automatically become available in 2018 under the Automatic Exchange of Information, to which Nigeria is a party. Nigeria will automatically get information through tax authorities of various countries.
“What VAIDS is doing is giving tax payers, both companies and individuals, a window of opportunity to regularise, to come clean so to speak, to declare fully, to declare honestly. In exchange for full and honest declaration, what we are assuring is that we will waive penalties that should have been levied, waive the interest that should have been paid on overdue tax which is quite considerable, those who declare honestly will not be subject to any investigation or tax audit” she explained.
She added that the scheme is also to help increase tax awareness and education. The Community Tax Liaison Officers, who are graduates recruited through the N-Power programme, would go into their communities, schools and other public places to raise awareness and help increase tax enrollment. We are recruiting a total of 7,500 CTLOs through this scheme.
The Minister gave details of the ‘Tax Thursdays’ programme which will operate for the next one year, as announced by the Acting President and would see tax awareness activities at State and Federal Government level to improve tax education and increase the number of tax payers from the current 14 million out of 69.5 million who are economically active.
The Minister gave assurances of the judicious use of funds, saying that “tax payment is part of the civic partnership between people and Government which would enhance participation and accountability.”
On the confidentiality of information generated on individuals, she assured that “all information collected would be treated as strictly confidential and our doors are open. We understand that some people have significant declarations and people can walk in to speak with me. We have already started receiving inquiries.”
