Citing inconsistencies in the country’s tax rate and lifestyles of many Nigerians, the Federal Government has reiterated its stance on prosecuting defaulters at the end of the extended deadline for the Voluntary Assets and Income Declaration Scheme (VAIDS) on June 30.
According to The Executive Secretary, Joint Tax Board, Oseni Elamah, the extended ultimatum was in a bid to increase tax compliance of Nigerians.
Elamah during a tax compliance clinic/sensitization for Micro, Small and Medium Enterprises (MSMEs) on understanding the requirements and benefits of tax compliance, in Lagos, said despite the nation having some of the most profitable and well capitalized companies and individuals, the tax remittance rate is still low.
He noted that Nigeria’s low tax is inconsistent with the lifestyles and spending habits of a large number of citizens.
According to him, Nigeria’s tax to GDP ratio at 6 per cent is one of the lowest in the world compared to India’s of 16 per cent, Ghana of 15.9 per cent and South Africa of 27 per cent, pointing out that most developed nation have tax to GDP ratios of between 32 per cent and 35 per cent.
He added that VAIDS would provide an opportunity to increase general tax awareness and compliance among the general public, saying that to profit from the scheme, taxpayers will be required to fully and honestly declare previously undisclosed assets and income.
“Many are engaged in transfer of assets overseas, use of offshore companies in tax havens and registration of assets in nominee names,” he said.
He stated that VAIDS is being implemented to ensure an increase in tax compliance as only 1 out of 5 economically active Nigerians currently pay tax.
He pointed out that the VAIDS is a project by the federal government of Nigeria aimed at providing opportunity for corporate bodies and individuals to regularize their tax status relating to previous tax periods, stressing that under the scheme, tax payers are given the opportunity to benefit from total waiver of outstanding and overdue interests and penalties.
“They also stand to benefit from the assurance that they will not face criminal prosecution for tax offences or be subjected to further tax investigations”, he added.
He said the benefits of VAIDS to the Nigerian economy include reduced cost of doing business, attraction of foreign investments, growth of non-oil sector and adequate canvas for economic growth and development.
Earlier, the President and Chairman of council of the Nigerian Small and Medium Enterprises (NASME), Segun Agboade, said Lagos and Edo States are the two focal States for the project, saying that all hands must be on deck to meet up the deadline of VAIDS.
He urged participants and MSME beneficiaries to take advantage of the sensitization programme.
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