- Â Says itâ€™s reviewing tax laws, legislations to coordinate tax concession
- Â Allocates 85% VAT to states to improve non-oil revenue
The federal government conThe federal government conceded a total of N1 trillion in tax exemptions, waivers between 2011 and 2015 to companies and corporations, THISDAY has learnt.
THISDAY gathered from a document obtained from the ministry of finance that the need to strengthen revenue mobilisation had necessitated the review of the tax exemptions, waivers and schemes to block rent seekers from taking advantage of governmentâ€™s concession regime.
The document titled, â€˜Funding Nigeriaâ€™s Needs from Within : Current Efforts in Domestic Revenue Mobilisationâ€™, indicated that, while the tax exemptions and waivers cost were incurred by the previous administration of former President Goodluck Jonathan, the present administration was reviewing tax laws and legislation and had introduced luxury surcharge to improve the government revenue base, requisite for its operations .
According to the ministry, the constrained finances of government were largely due to low domestic revenue mobilisation, which was due to small tax base and low tax collection rate and significant amounts of revenue conceded to uncoordinated duties and waivers.
Pointing out that revenues and budgets had not been large enough to meet the nationâ€™s needs, the government in the document maintained that â€œdomestic revenue mobilisation must increase for sustainability.â€
As part of the key revenue initiatives, the government pointed out that it launched Voluntary Assets and Income Declaration Scheme (VAIDS) earlier in the year to bring tax evaders into the net and rein in enormous tax revenues while also striving to improve non-oil revenue.
According to the document, â€œVAIDS is a time-limited opportunity for tax payers to regularise their tax status relating to previous periods. It is a significant opportunity for both Federal and State governments to increase tax net and revenues.â€
In its bid to improve non-oil revenue, the government has allocated 85 per cent of Value Added Tax (VAT) collection to states while also considering car taxes, road taxes as well as capturing the value of solid minerals.
While lamenting that underpayment of tax via the use of tax havens and other evasion strategies had been debilitating to Nigeria, the ministry of finance said, â€œThis practice has been principally perpetrated by multinational companies and high net worth individuals.â€
The government, which noted that, at 6 per cent Nigeriaâ€™s non-oil tax to GDP was one of the lowest in the world, believed, VAIDS will â€œcapitalise on the considerable international goodwill built by President Buhari in his mission to rebuild Nigeria and the current global movement against tax evasion and illicit financial flows.â€
The scheme, it added, will â€œoffer a window for those who have not complied with extant tax regulations to remedy their position by the provision of a limited amnesty to enable voluntary declaration and payment of liabilities.â€
VAIDS, which is supported by the recent establishment of the Asset Tracing Team within the Ministry of Finance, has engaged the services of International Asset Tracing and Investigations specialists, who are working alongside local teams to trace assets held by Nigerians who had evaded tax. â€œThe data obtained will be used to cross check the accuracy of declarations made under the scheme or to prosecute those not participating in the scheme when the programme expires.â€
According to the ministry of finance, VAIDS was open to all persons who were in default on their tax liabilities including taxpayers who: â€œhave not been fully declaring their taxable income/assets; have not been paying the tax due at all and or have been underpaying or under remitting.â€
Besides, the ministry stated that, â€œThe programme is open to both new taxpayers who are yet to register with the tax authorities and the existing registered taxpayers who have new disclosure to make. The scheme applies to tax defaults on undeclared assets within or outside the country.â€