By; Sunday Ode, Abuja
Chairman of the Federal Inland Revenue Service (FIRS) Babatunde Fowler, has disclosed that the proposed new tax reform by the Federal Government would help to generate at least $1 billion within the next three years.
Fowler explained that beginning from May this year, a new tax reform, known as the Nigerian Voluntary Asset and Income Declaration Scheme (VAIDS), would help to add fillip and boost Nigeria’s national revenue.
The FIRS boss gave the indication while briefing the State House Correspondents at the end of the National Economic Council (NEC) meeting which was held at the Presidential Villa, Abuja.
He explained that a situation where the authorities were operating a tax payment scheme that gives room for tax haven and other sundry evasion strategies has not augured well for Nigeria.
Fowler who addressed the newsmen along with the Governor of Abia State Okeze Ikpazu, and the Deputy Governor of Kaduna State, Bala Bantex, said the practice has been perpetrated mainly by multi-national companies and other high profile individuals in the country.
He explained that Nigeria has the lowest non-oil tax to Gross Domestic Product (GDP) at 6 percent, adding that the proposed VAIDS will capitalise on the considerable international goodwill built by President Muhammadu Buhari-led administration to rebuild Nigeria and capitalise also on the current global movement against tax evasion and illicit financial flows.
“It will offer a window for those who have not complied with extant tax regulations to remedy their position by the provision of limited amnesty to enable voluntary declaration and payment of liabilities.
“VAIDS scheme targets to increase the tax to GDP ratios to 15% from just 6% by 2020. It will simultaneously generate revenue and encourage investment and economic activity – as only 214 individuals in the entire country pay N20 million or more in tax annually,” the FIRS chairman noted.
The VAIDS scheme, he further said, 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.
It is intended to cover all back taxes without any limit to time on how far back a tax assessment can go where a taxpayer has wilfully defaulted.
Government has said that the scheme is targeted to run from May 1, 2017 for up to 6 months and incentives will be put in place to encourage early participation
Under the new arrangement, according to it, tax payers will be allowed up to 3 years to settle their liabilities.
Fowler said initial estimates anticipated that at least 50 percent of the funds recovered will belong to states who are the ultimate collectors of personal income taxes.
Meanwhile, the Federal Government is to sign a Memorandum of Understanding (MoU) to be gazetted with each State Government.
NEC was also briefed on the status of the Excess Crude Account (ECA) which presently stands at $2.458billion as at March, 2017. The amount is a marginal increase of $2.458billion
The Minister of Finance, Mrs. Kemi Adeosun had informed council that the ECA balance does not reflect the decision of Council last month to deduct S250 million for injection into the Sovereign Wealth Fund.
Adeosun also announced that the balance in the Stabilization Fund Account (SFA) now stands at N25.793billion.
Kaduna State deputy governor told State House Correspondents that Council was also briefed on the state of insecurity in the country including Boko Haram insurgency, cattle rustling, ethnic militia, kidnapping, Niger Delta militancy, armed robbery proliferation of small arms.
According to him, the National Security Adviser (NSA), Major General Babagana Mungunu identified unemployment as the major threat to security.
He said, “in their responses, Council members highlighted the potential role and significance of the Federal Government’s Social Investment Programmes in averting some of the threats and encouraged an active implementation going forward.
Council agreed to hold an extra-ordinary session to discuss security matters especially as it has to do with the economy.