FG plans to raise $1 billion through tax amnesty program
Due to high number of both individual and corporate tax defaulters in the country, the program, “VAIDS”, is expected to rake in about N306 billion ($1 billion) in tax income for the government between the July 1 and December 31, 2017.
According to a statement released by the Federal Ministry of Finance in Abuja via email, the Ministry noted that the new tax amnesty is to give tax evaders a chance to make unpaid taxes without any fear of punishment or penalties.
“VAIDS will provide a window in which all those – individuals and organisations – who have not complied with extant tax regulations can make amends by taking advantage of the provision of limited amnesty, to enable voluntary declaration and payment of liabilities.”
“VAIDS will embrace all Federal and States’ taxes, such as Companies Income Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duties, Tertiary Education Tax, and Technology Tax.”
“During the Amnesty period, there will be no penalties, interest obligations, and prosecution or audit investigations. So, we expect that all declarations will be complete and honest.”
The program is to be coordinated in collaboration with the government of the state and FCT.
Explaining the rationale behind the program, the Finance Ministry noted that “Nigeria has one of the lowest non-oil tax to GDP ratio in the world, at six percent. Compare this with Ghana (16%), South Africa (27%), and OECD Average (34%).”
Further to this, only 214 individuals in Nigeria pay N20 million or more in tax annually, noting that the country continues to greatly suffer the debilitating effects of tax evasion and underpayment.
“Multi-national companies and high net worth individuals use Transfer Pricing and Tax Havens and other sophisticated evasion strategies," the Ministry stated.
Going by this plan, the government expects that it would be able to achieve this tax collection target to further reduce the borrowing need of the country. Also, this would assist investments in strategic infrastructural facilities that will spur development.
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