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VAIDS deadline: Panic grips politicians, others

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VAIDSAS the nine-month amnesty period granted tax defaulters through the Voluntary Assets Income Declaration Scheme (VAIDS) expires, there has been a desperate scramble across the country to file necessary forms and meet the deadline.

As of last week, a total of N48 billion had been generated from the scheme through which government thought it would rake in at least N300 billion, although a source at the Project Lighthouse, which is the policy’s data mining office, told Sunday Tribune that the figure was likely to quadruple by the close of deadline this weekend.

According to Chairman, Federal Inland Revenue Service, Mr. Tunde Fowler, “the target amount we were looking at was $1 billion which, I think, is about N305 billion and this includes both corporate and individuals.

“So, we have received a lot of enquiries. We have received a lot of proposals but in terms of the payment, they have not paid yet. So, we believe that in the second week or mid-March, that would be a better indication as to what value we are looking at. But to us, N305 billion is doable,” he noted

Observation by Sunday Tribune during last week in some state tax offices revealed serious complaints by citizens who waited until close to the end of the scheme in the hope that the deadline would be extended.

Already, at least N2 trillion worth of properties have been identified by the team from Project Lighthouse, which is the data mining office in Lagos, Ogun, Abuja, Kano, Rivers and other states.

A Presidency source also told Sunday Tribune that, while some high net worth Nigerians have been selling off their properties abroad, many politicians, including both former and current office holders, have been lobbying for an extension of the March 31 deadline.

“But when you look at the assets and the vehicles that are on our roads, that tells me that there is something wrong because if you look at the average house in Ikoyi or the average house in the high net worth neighbourhoods in Kaduna or in Rivers State, you’ll find houses that are worth over N500 million. So, if an individual has a house or a home worth over N500 million and did not pay N10 million in tax, where did he get his money from?”

Fowler continued: “Now, we carried out an exercise for corporate Nigeria and we are doing it nationwide. We started off in Abuja. We looked at all corporate organisations that owned property then, we got a valuation of those properties. We found out that over 2,000 properties are owned by corporate organisations that did not pay one kobo in tax.

“Now, what the law says is that if you don’t file your returns, we can use an estimated turnover and based on that turnover, we assume you make a profit of 20 per cent and we charge you at 30 per cent. For example, if your turnover is N100 million, we assume out of that turnover, you make N20 million profit then we charge that N20 million at 30 per cent, so, you get about N6.6 million in tax.

“We found out that we have properties in excess of N2 trillion in Abuja alone under corporate names that have not paid any tax and so, we are in that process now. We have sent out assessments and we are now going to court to get approval or a judgment that will let us seize those houses and sell them for the tax amount.

“We also have concluded that of Lagos. We are nearly concluding Kaduna, and I believe without doubt, by the time we conclude all the other states within Nigeria, you’ll find out that corporate names that own properties would be multiples of trillions that have not paid any tax.

“The same goes for individuals. If you have a home worth N100 million and you’re paying N10,000 tax, there is a mismatch. You either have to show us which father gave you the house and if he gave it to you as a present, you must also show us if he had paid tax.”

And in the last few months, Project Lighthouse has uncovered another 130,000 high net worth individuals and companies believed to have underpaid their taxes.

Also speaking, Finance Minister, Mrs Kemi Adeosun, said data were currently being compiled by Project Lighthouse in preparation for the closure of VAIDS, which ends this month.

“The data have been received from a number of sources including land registries of the governments of Lagos, Kaduna, Kano and Ogun states as well as the Federal Capital Territory. In addition, Nigeria has been able to request data from a number of nation including traditional tax havens.

Lagos and the land use charge controversy

The data have been received from a number of foreign jurisdictions under the exchange of information protocols. Under the exchange of information protocols, this information relates to bank records and financial filings for tax purposes and is obtained from tax havens who are signatories to the information sharing agreements such as the British Virgin Islands and Mauritius.”

She explained that the data received from overseas countries would only be used for taxation purposes in line with the protocols governing the exchange of information, adding “the sole interest of the federal and state governments in the use of the data is in raising tax revenues. There is absolutely no hidden agenda on the use of the data.”

But in separate interviews, Adeosun and Fowler dismissed such possibility, with Adeosun saying that a decision in that regard lay purely with the President, who signed the Executive Order.

Nigeria has also been able to substantially increase the number of taxpayers and amount of tax collected since 2017 with Fowler saying “in 2016, we were about six per cent. 2017, we were able to cross N4 trillion. Customs for the first time in history, crossed N1 trillion.

We are looking at the collection of all the states, agencies and from the information we got so far, they equally crossed N1 trillion so that tells us that for 2017, the internal generated revenue (IGR) from tax will be in excess of N6 trillion. So, hopefully by the end of March when we get the actual figures, we’ll tell you the new percentage of tax GDP but we believe that for government at all tiers to be able to provide services, we have to hit at least 20 percent.”

A top source also said that prosecution of those who fail to meet the deadline will be through special courts in the states so that there will be accelerated dispensation of the cases.

However, Sunday Tribune gathered that because of the Easter holidays, “one or two working days may be added in April.”

Vice President Prof. Yemi Asinbajo in his capacity as acting President last September signed an Executive Order granting the tax amnesty for defaulters allowing individuals and companies to file their outstanding tax liabilities with a waiver of both accruing interests and penalty charges.

During the ceremony, Osinbajo disclosed that only 214 of taxpayers pay N20 million or more annually, while about 900 taxpayers pay N10 million per annum with all the 214 based in Lagos, adding that of the 900 also paying N10 million, all but two are based outside Lagos.

The post VAIDS deadline: Panic grips politicians, others appeared first on Tribune.

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