You are here
Home > BUSINESS > N305bn target for VAIDS is do-able – FIRS Chairman

N305bn target for VAIDS is do-able – FIRS Chairman

Please follow and like us:

  • 0
  • Share

As the deadline for the tax amnesty period under the  Voluntary Asset and Income Declaration Scheme (VAIDS), draws near, Chairman of the Federal Inland Revenue Service, Mr. Tunde Fowler, in this interview, gives more perspective to the scheme. Excerpts:

By Emeka Anaeto and Prince Okafor

You set a target of March, 2018 for the window of pardon for VAIDS. After that what next

Chairman of the Federal Inland Revenue Service, Mr. Tunde Fowler
Chairman of the Federal Inland Revenue Service, Mr. Tunde Fowler

What follows! We will follow the laws that deals with tax administration and companies that are not compliant we will investigate them, prosecute them and we take all actions in line with the law which includes the stoppage of activities and if need be sell off assets.

Is there possibility of extending deadline.

The decision on extension does not lie with me, it was a decision whereby all tiers of government were involved. I don’t have the capacity to change the approval, the only person that can change it for whatever reason, is the President, and the Vice President who is in-charge of the economy through the Minister of Finance.

Are you focusing on the big income earners or all

Every Nigerian is included. It is not for only the rich and wealthy, tax is for everyone. Task is based on profit and income, what we look at when we check both individuals and corporate books is the level of compliance. The law that is applicable to the wealthy also bounds everyone.  The amount is not the problem but the compliance level.

What is the target amount we are looking at. What has come in so far.

The target amount we are looking at is USD1 billion which is equivalent of about N305 billion, and this includes both corporates and individuals. What has come in so far from corporates is about N20 billion. What people will say is that it seems small, but what we got from the experience of other countries is that most people naturally wait for the last moment.

We have received a lot of proposals, but in terms of payment they have not paid yet. Second week or mid-March will give us a better view of what we are looking at.  N305 billion is do-able.

There is this belief that those with connection will escape or be exempted.

My approval came from the present Senate and the Minister, and they have assured FIRS of full support. We are not going to give any preference to anyone, we have the backing of the President and Minister of Finance and none of them has mentioned we take political consideration into account, we promised to do our job and there is no sacred cow.

Is it true FIRS has compiled list of Nigerians who have assets abroad  for this purpose

Before VAIDS started, we did a profiling of all the tax payers on different categories under PAYE (Pay As You Earn), we found out that only 943 individuals pay N10-million and above in tax in the whole of Nigeria, and all were from Lagos but two from Ogun State. That tells me that there is no billionaire or multi-millionaire in all other states of the federation.

But when we look at the assets, average houses in the high net-worth neighbourhood you find out that they are worth over N500 million and the vehicles on the road, it shows something is wrong. We carried out an exercise on corporate organisations across the federation, we found out that over 2000 are owned by corporate organisations that have not paid one kobo in tax.

What the law says is that if a company don’t file tax returns we can look at the estimated turnover and we assume a profit of 20% and we charge you at 30% percent. We found out that there are houses in cooperate names worth over N2 trillion that have not paid any tax. We have sent out assessment and we are about to get approval from court to seize those houses and sell them for the tax amount.

We concluded Lagos, we have nearly concluding Kaduna. By the time we conclude across the federation, there will be more revelation of tax defaulters in the country running into trillions.

This also go to individuals, high net-worth indiduals paying small tax. The whole idea is to make sure we all put our hands to make Nigeria work.

I was at a United Nations meeting, and experts came up with a formula warning that if a country’s tax-to-GDP ratio is below 15% it is unlikely that they can expect economic development in that country or any infrastructure. In 2016 Nigeria was about 6 percent. In 2017 Nigerian was able to cross N4 trillion tax revenue for the first time in history. Also state revenue agencies crossed N1 trillion. That tells us that the IGR revenue is in the excess of N6 trillion.Hopefully by the March we can have the new percentage of tax-to-GDP.

But we believe that for government at all level to be able to perform they must be able to generate at least 20 percent of their revenue from tax for the government to function effectively and Nigerians begin feeling the impact of government, you have a good road, good healthcare and improve life of expectancy. Nigerians has no business being under 15% tax-to-GDP.

What kind of support do you have from State Governments

We have a very good support. In 2016 we signed an MoU to exchange information with all the states internal revenue services, all tax companies that were register by the state were given to us and we did as well.

Through that MoU states were able to discover companies that pay to us that do not pay to them, and over 200,000 companies were discovered that pay to the states revenue collection service but not to the federal government. We were able to expand our tax database and we also agreed with the states to do a joint audit with the states. This will help us do a national audit and then we will now tell each of the states what a company with branches across the federation are owing. But most state governments are not taking that offer. They want to deal individually, meaning that a lot of the states are not ready to declare fully. We still believe strongly this will save us money and make us more efficient. Both the states and FIRS are working closely, hopefully we can achieve 100 percent soon.

Beyond the shores of Nigeria are there organizations you are working with.

We have signed several agreements with OECD to exchange information, meaning they can ask us for information on cooperate entities that transact with us, and we can likewise. And a number of countries have given us information on companies in Nigeria and individuals who own houses in their country.

For those who hide their money away from the banks, the ‘unexplained wealth order’ used in Britain to tax individuals based on their property is being used, meaning that if a foreigner owns a house and cannot substantiate how he got that, the source of income, the property will be taken away,

Some countries have taken up that step already. This means many individuals have realized that many countries are now becoming careful who comes into the country, and we hope do more.

How do you ensure corporate organizations remit their tax

We are addressing that to ensure every corporate organization tax their workers and remit accordingly. We are working closely with the state governments on that. Every individual must have a tax clearance. We are consolidating a database, that will ensure everyone get to know their tax payment records. Workers should ask payers for it and ensure they get it. If in cases the employers don’t we come for them, request for tax certificate from their employers. Some organisations deduct tax from workers and they don’t remit it, others from VAT but they don’t. So we are working with consultants to design VAT forms, certificate that will display in every business, that it can be easy to know if a business pays tax.

What is the incentive to tax payers

Taxation is a matter of conscience. First, tax helps our country better, it helps create a better society, we are ready to make sure everybody pays. Tax is a duty for everyone, and that is one sure way to help Nigeria grow economically. If everybody pay tax, there will be a big push.

Any company that works for government must have a tax clearance certificate. If a company is discovered to have defaulted in tax will be deducted and payment will be withheld.




The post N305bn target for VAIDS is do-able – FIRS Chairman appeared first on Vanguard News.

Facebook Comments

Please follow and like us:

  • 0
  • Share

Leave a Reply