The Federal Government is to offer tax defaulters with huge (tax) liabilities a period of three years to spread their tax payment under the Voluntary Assets and Income Declaration Scheme.
This is one of the strategies of the government to ease the burden of such debtors by taking advantage of the new tax scheme to offset their debts.
The VAIDs programme offers a grace period from July 1, 2017 to March 31, 2018, for tax defaulters to voluntarily pay back to the government what they owe.
In exchange for full and honest declaration, the government promises to waive penalties that should have been levied and the interest that should have been paid on overdue tax.
Also, those who declare their tax obligation honestly would not be subjected to any investigation or tax audit after the nine month grace period.
Nigeria has one of the lowest tax compliance rates in the world with a tax-to-Gross Domestic Product ratio currently standing at six per cent.
The ministry of finance had in May this year approved a new interest rate on unpaid taxes, which it pegged at five per cent over the Central Bank of Nigeria’s Minimum Rediscount Rate for 2017.
The CBN’s Monetary Policy Rate currently stands at 14 per cent, thus implying that with the five per cent spread, tax defaulters will now have to pay an interest rate of 19 per cent on tax debts.
The Minister of Finance, Mrs. Kemi Adeosun, on Tuesday challenged stockbrokers to assist the government to identify those who have huge investments in securities but are not paying the correct taxes.
She said, “We recently launched the VAIDS scheme and those of you who are privileged to see the forms would notice there is a huge section on investment such as mutual funds, shares and other investments, which we are expecting patriotic Nigerians to voluntarily declare and pay the taxes and arrange to pay any taxes they have not paid on the acquisition of those assets.
“We have only 214 Nigerians paying taxes of N20m and above and you as stockbrokers have a role because you are the transaction managers, and brokers of many of these transactions, and many of these complex tax shelters you help to set up.”
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