By Emma Ujah, Abuja Bureau Chief
ABUJA — Minister of Finance, Mrs. Kemi Adeosun, said, yesterday, that the Federal Government would take advantage of the Panama and Paradise Papers to cross-check the tax declarations of Nigerians mentioned in the leaks.
Adeosun, who disclosed this during an interaction with newsmen in Abuja, also advised Nigerians to review any existing tax planning schemes, including those in offshore tax havens, to take advantage of the Voluntary Assets and Income Declaration Scheme, VAIDS, to regularise their tax status where necessary.
Noting that the Panama and Paradise Papers leaks were just the beginning of what was likely to be a systematic unravelling of the offshore tax haven system, Adeosun said her ministry’s data mining project would use data provided on Nigerians from such leaks to enhance government’s tx revenue.
She urged Nigerians to cooperate with the government by paying the right taxes to both the federal and state governments to provide the much needed funds that will improve the lives of the people.
The minister maintained that sanctions awaited defaulters who refused the Federal Government’s offer of tax amnesty, including the full payment of outstanding tax liability and criminal prosecution.
She said further that businesses, which untruthfully complied, would be liable as whatever was paid on the declared liabilities might be considered as part-payment of the outstanding sum later discovered by the authorities.
On impetuous defaulters who fail to utilise the VAIDS window, Adeosun said such offenders would face criminal prosecution by the Federal Government.
On the Voluntary Assets and Income Declaration Scheme, VAIDS, the minister stated that while the use of tax avoidance schemes was legal, tax evasion was not.
She said: “The critical question to be asked of all Nigerian tax payers using offshore tax shelters will be whether all applicable taxes have been paid prior to the transfer of funds or assets to a tax shelter.
“If all taxes had been paid, then there will be no additional liability except tax payable on further income earned on those funds. However, if taxes had not been paid, then the use of such schemes is illegal.”
Adeosun counselled users of such structures to seek professional advice, explaining further that the Federal Ministry of Finance was offering free training to professional advisers on the VAIDS to enable them support their clients.
She urged users of offshore tax shelters to promptly embrace the VAIDS scheme to regularize their tax status, adding that Nigeria’s low tax revenues were at variance with the lifestyles of a large number of its people and with the value of assets known to be owned by Nigerians resident around the world.
“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.
“In exchange for fully and honestly declaring previously undisclosed assets and income, taxpayers will benefit from forgiveness of overdue interest and penalties, and with further assurance that they will not face criminal prosecution for tax offences or be subject to tax investigations,” stated Nigeria’s Finance Minister.
Adeosun, who also responded to further questions from the media practitioners, explained that with the increasing global focus on illicit financial flows and tax evasion, offshore tax shelters no longer offer robust protection against tax authorities.
She added that the continued use of such schemes posed enormous risks for the users.
VAIDS was established on 29th June, 2017 via an Executive Order signed by Vice President Yemi Osinbajo (the then Acting President) as a broad-spectrum solution to virtually all the defects in the country’s tax system, including negativity towards taxation.
The first phase of VAIDS runs from 1st July, 2017 while the second phase ends on 31st March, 2018.
Job creation is one of the spin-offs of the VAIDS initiative, with the scheme expected to create a total of 7,500 opportunities for Nigerians as Community Tax Liaison Officers, CTLOs, through the N-Power scheme of the Federal Government.