Chairman of the Federal Inland Revenue Service (FIRS), Mr. Tunde Fowler, has urged members of the Institue of Directors (IoD) to take advantage of the Voluntary Assets and Income Declaration Scheme (VAIDS).
Fowler gave the advice in Lagos on Tuesday evening while making a presentation on the tax amnesty scheme to IoD members.
In the presentation titled, “Achieving Voluntary Tax Compliance: The VAIDS Option”, the FIRS Chairman explained that the key motivation for introducing the scheme is that the country’s tax remittance rate remains low despite having some of Africa’s most profitable and well capitalised companies.
“Nigeria’s low tax revenues are inconsistent with the lifestyles and spending habits of a large number of citizens. Many are engaged in transfer of assets overseas, use of offshore companies in tax havens and registration of assets in nominee names,” said Fowler.
He noted that tax evasion constitutes a significant challenge to the government and listed a number of ways through which taxes are evaded. Among these, he said, are manipulation of accounting records, use of complex structures for transanctions, non-registration for Value Added Tax (VAT), non-payment of Capital Gains Tax ( CGT) on asset disposal and escaping detection of income due to lack of machinery for tracing such.
The FIRS boss, however, warned that under VAIDS, tax evaders will not escape. He explained that the Federal Ministry of Finance, in collaboration with relevant tax authorities, is building a revenue assurance platform through extensive gathering of data from sources that include Bank Verification Number (BVN), Nigerian Financial Intelligence Unit (NFIU), Corporate Affairs Commission (CAC), land allocation and land ownership records, foreign exchange allocation returns and bureaux de change records. Others are Central Securities Clearing System (CSCS), information from foreign governments as well as whistleblower tips and leaks.
The FIRS Chairman instantiated information from foreign governments with the recently passed Unexplained Wealth Order in the UK, Wikileaks, Panama Papers and Automatic Exchange of Information (AEoI), to which Nigeria is signatory.