Voluntary Asset and Income Declaration Scheme (VAIDS)
Starting July 2017, the Federal Government, through the Ministry of Finance, and in collaboration with the 36 State Governments and FCT will unveil a Tax Amnesty Programme: the Nigeria Voluntary Asset and Income Declaration Scheme (VAIDS).

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, & Technology Tax.

During that Amnesty period there will be no penalties, interest obligations, prosecution or audit investigations. We expect that all declarations will be complete and honest.
Rationale:
*Nigeria has one of the the lowest non-oil tax to GDP ratio in the world, at 6%. Compare this with Ghana (16%), South Africa (27%), and OECD Average (34%). [Only 214 individuals in Nigeria pay 20 million Naira (c.US$65,000) or more in tax annually.]

*Nigeria continues to greatly suffer the debilitating effects of tax evasion and under-payment. Multi-national companies and high net worth individuals use Transfer Pricing and Tax Havens and other sophisticated evasion strategies.

*VAIDS will capitalise on the considerable international goodwill built by President Buhari in his mission to rebuild Nigeria, as well as on the current global movement against tax evasion and illicit financial flows.
What happens if people and companies refuse to comply?
The Federal Government will pursue all legal and legitimate avenues to uncover and penalize all tax dodgers and defaulters. Outside of the Amnesty period this will include prosecution and interest payments on unpaid taxes. Uncovering tax defaulters will now be much easier than in the past on account of a number of new or recent Transparency initiatives, including but not limited to the following:

*The use of BVN data

*The emergence of various international initiatives aimed at blocking the loopholes and avenues by which firms and companies evade tax payment globally, including Registers of Beneficial Ownership, the US Foreign Account Tax Compliance Act, and a number of Automatic Exchange of Information initiatives. For example Nigeria has recently approved the ratification of the Agreement for the establishment of the West African Tax Administration Forum (which will be hosted by Nigeria).

*The Federal Executive Council has also this month granted permission for the Ministry of Finance to sign the global convention on Base Erosion and Profit Shifting — a practice that has allowed companies who generate profits in Nigeria to evade taxes by shifting those profits to countries where little or no tax is payable.

*The Federal Ministry of Finance has in the last 15 months been engaged in a massive data gathering exercise — engaging one of the world’s leading global investigation agencies to trace funds that originated from Nigeria and have been illegally diverted across the world in a bid to avoid tax payment.

*The Ministry of Finance is launching a Community Tax Liaison Officers (CTLO) Scheme to recruit young Nigerian graduates to serve as Tax Educators and to help the Government enrol new Taxpayers. Details in Policy Blog section below.