Fresh insights have emerged on the failure of the Federal Government’s success target on Voluntary Assets and Income Declaration Scheme (VAIDS), one of the measures instituted by Muhammadu Buhari administration to improve tax collection.
It was brought in via executive order number 004 of 2017. The rationale for instituting VAIDS is to provide an opportunity for chronic tax evaders to be recaptured into the country’s tax basket for continuity.
Business Hilights recalls that in 2017, the Federal Government of Nigeria launched the VAIDS as a “time-limited opportunity for taxpayers to regularise their tax status relating to previous tax periods and pay any taxes due.
“In exchange for fully and honestly declaring previously undisclosed assets and income, tax payers will benefit from forgiveness of overdue interest and penalties” and the assurance they do not face criminal prosecution for tax offences or tax investigations.”
In other words, a regime of ‘tax amnesty’ was put in place within the period but compliance was not as expected after all.
Revealing more during an interview in a national TV programme, international Tax Consultant, Mr. Tope Fasua revealed that contrary to earlier claims of success by the government and mainly Ministry of Finance under former Minister, Mrs. Kemi Adeosun, only about 10 per cent success was recorded during the period of the scheme with heavy operational costs.
Explaining more, Fasua decried that contrary to professional advice on processes ahead of introducing VAIDS which included massive nationwide awareness on changing tax culture of Nigerians, government went ahead with VAIDS and only recorded minimal success with huge costs on government.
Majority of the costs came from consultants and operational expenses incurred during the regime of the scheme as only about N34bn was reported by the government as recovery from the exercise.
Continuing, the expert made it clear that for Nigeria to get it right in growing tax culture, government must do the needful by deepening awareness programmes and improving on transparency in tax administration than the current hostile approach which he said, is always counterproductive.
However, it may have been on the premise of the failure of VAIDS that President Muhammadu Buhari on Wednesday, said the Federal Government would deploy dynamic initiatives towards boosting the country’s revenue from taxation.
He said this in Abuja at the opening session of the 21st annual tax conference of the Chartered Institute of Taxation of Nigeria (CITN), which is the single largest gathering of tax practitioners in Nigeria.
The conference theme; ‘Unlocking the potential of taxation,’ revealed further that a lot may have been wrong with government’s previous tax revenue growth plans.
Represented at the event by the Permanent Secretary , Federal Ministry of Finance , Mahmoud Dutse, the President explained that his administration was committed to diversifying the country’ s revenue base through the use of taxation and called for a change of attitude by Nigerians towards the payment of taxes.
According to him, the current administration was aware of some of the loopholes in the country’s tax system, noting that efforts were being made to change the narrative.
He said, “Our tax system must reflect the nature of our commercial activity levels. Oil is just above 10 per cent of our GDP but it represents a disproportionate share of our tax revenue.
“We will, therefore, develop a framework that mobilises revenue from the non-oil sector. Our tax system must be dynamic in order to respond to an ever- evolving commercial landscape and to increasing technology-driven business models,” President Buhari averred.
