The Minister of Finance, Mrs. Kemi Adeosun said very few Nigerians pay tax above N20 million, adding that most of them were based in Lagos. Owing to this, the Federal Government yesterday insisted it will deploy latest technologies to confront tax evaders in order to increase compliance under the recently launched Voluntary Asset and Income Declaration Scheme (VAIDS).
Speaking in Abuja yesterday, the Minister of Finance, Mrs Kemi Adeosun said very few Nigerians pay tax above N20 million, adding that most of them were based in Lagos.
“Out of about 180 million, less that 1,000 people pay N20 million and above as tax and they are mostly in Lagos. For you to pay N20 million means you earn above N80 million. Are we saying that other Nigerians elsewhere are not earning up to N80 million annually? She queried.
She 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 further highlighted that at six per cent tax to GDP ratio, Nigeria’s tax compliance rate was too low as most developed nations were at 30-32 per cent.
“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”, she said.
Adeosun revealed that the government had deployed data mining firms to compile data on thousands of tax payers, which showed the level of non-compliance and tax evasion.
She cited the Biometric Verification Number (BVN), land registry and other sources within Nigeria as well as data from foreign governments to buttress the gap in tax payment.
Adeosun 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.
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.
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”, she noted.
Did you find this article informative? Kindly like,comment and share!