VAIDS: No Sacred Cows after Deadline, Fowler Warns

•  El-Rufai, Adeosun to meet Kaduna taxpayers

By Francis Ndubuisi in Abuja and Obinna Chima in Lagos

As the March 31, 2018, deadline given by the federal government for tax amnesty under its Voluntary Assets and Income Declaration Scheme (VAIDS) draws nearer, the Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler, has warned that there would be no sacred cows after the cut-off date.
Fowler gave this warning in an interview with journalists in Lagos at the weekend, just as the Minister of Finance, Mrs. Kemi Adeosun, and the Governor of Kaduna State, Malam Nasir el-Rufai, plan to engage Kaduna business leaders and taxpayers on the tax amnesty programme.

According to Fowler, the government would enforce the laws on tax administration once the deadline ends.
He warned: “What follows after the deadline is that we shall follow the laws that deal with tax administration and for those that are not complaint, we shall investigate them and if need be we prosecute them.
“We shall take all actions in line with the law, which include the stoppage of their business activities and if need be, the sale of assets.”
Fowler explained that extending the deadline for VAIDS would not depend on his agency, saying before the scheme was introduced, it was approved by the Federal Executive Council (FEC), the National Assembly and the state governors.

He said: “So, I don’t have the capacity to change that approval. I think the only person that can, for whatever reason decide to give an extension would be the president or the vice president that oversees the economy, through the Minister of Finance.
“People say we should use the 80-20 principle, meaning that we focus on those that give you 80 per cent of your tax revenue. But when it comes to tax, just like the lady that gave the widow’s might and Jesus said she gave more than the rich men because she gave all that she had. It was not subject to the amount.

“That is how a tax is. You can say you are a big taxpayer and that you have paid N1 billion and because you have paid N1 billion, we should overlook the N500 million you are owing.
“Meanwhile, somebody who paid N100,000 paid 100 per cent of his tax liabilities, meaning he was 100 per cent compliant.
“The organisation that paid N1 billion and still had N500 million left, was only 50 per cent compliant. So, you can’t compare them. Tax is based on profit and income.
“So, what we look at as tax administrators is the level of complaint. That is, we should use the same law for those who are paying N100, 000 and those who are paying N1 billion.”

According to the FIRS boss, out of the N305 billion the government set out to realise from VAIDS, it has got about N20 billion.
He was, however, optimistic that before the middle of next month, the amount would rise significantly. He disclosed that FIRS has been inundated by enquiries from taxpayers about VAIDS. This, he was hopeful, would lead to improved compliance before the deadline expires.
He explained: “Now, what has come in so far from the corporate angle is about N20 billion. Now, what people would say is that it seems small.

“But our own experience and the experience of those who have had similar programmes, whether it be Turkey, India or South Africa, is that everybody waits till the last moment.
“So, we have received a lot of enquiries. We have received a lot of proposals, but in terms of payment, they have not paid yet.
“So, we believe by mid-March, there would be a better appreciation of the value we are looking at. The N305 billion is doable.”

The FIRS boss, who expressed disappointment at the country’s low tax to Gross Domestic Product (GDP) ratio of six per cent as of 2016, believes that with initiatives such as VAIDS as well as efforts by the government to promote tax compliance, the amount would have risen significantly when the next GDP figures are released next month.
He said: “I was in the United Nations last week and the experts came up with a formula and said if any country’s tax to GDP ratio is below 15 per cent, it is highly unlikely that they can expect economic or social development in that country. In 2016, we were about six per cent.

“In 2017, through the support of the media, the FIRS was able to cross N4 trillion, Nigeria Customs for the first time in history crossed N1 trillion. Hopefully by the end of March when we get the actual figure of per cent of Tax to GDP.
“But we believe that for government at all tiers to be able to provide services, we must hit at least 20 per cent so that we can start feeling the impact of government.”

Responding to a question about the possibility of FIRS bowing to pressure or interference in its resolve to enforce the laws after the expiration of the deadline, Fowler said: “Let me put it this way: I am a nominee of the president and I was approved by the Senate, under the supervision of the vice president and the Minister of Finance.
“All of them have assured the FIRS 100 of per cent support and none of them has said we should take political considerations into account.
“None of them has said we should take the status of persons or corporate organisations into account.”

El-Rufai, Adeosun to Meet Kaduna Business Leaders, Taxpayers

In Kaduna, the state Governor, el-Rufai, and the Minister of Finance, Adeosun, will on Thursday meet with business leaders, business owners and taxpayers in Kaduna over VAIDS as the nine-month-long tax amnesty programme ends March 31.
The Kaduna State Government is hosting the VAIDS Stakeholders’ Symposium, which is expected to have in attendance Fowler, members of the state executive council and the House of Assembly as well as traditional rulers.
Also invited to the sensitisation meeting are business groups, tax advisers, captains of industries, professional and artisan bodies, and other strategic economic groupings within Kaduna State and environs.

Adeosun has identified regular tax payment by Nigerians as fundamental to the growth and development of the country.
She noted that predictable tax revenue inflow would lead to more investment by the federal and state governments in infrastructure and job and wealth creation across the nation, a statement by her media aide, Mr. Oluyinka Akintunde, said.
The minister stated: “Payment of taxes is a fundamental requirement for our growth story. Nigeria has a very poor scorecard in tax payment. When oil came, we abandoned the old systems of tax collection that provided most of our infrastructure since colonial days.

“Currently, we have just 14 million taxpayers out of 70 million who are economically active. So, many people who should be paying are not paying anything. It is the development of taxes that will help the States and the Federal Government to achieve their true potential.”
She advised taxpayers to take advantage of the tax amnesty opportunity to regularise their tax profiles, adding that tax defaulters would be subjected to investigations as well as made to face criminal prosecution for tax offences.
The VAIDS programme, which commenced on July 1, 2017, provides an opportunity for taxpayers to voluntarily and truthfully declare their assets and incomes before the March 31, 2018, deadline.

It embraces all federal and state taxes such as Companies Income Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duties, Tertiary Education Tax, Technology Tax, Tenement Rates, and Property Taxes.
VAIDS also covers all back taxes for the last six years in line with the statutory periods of limitation under the relevant tax statutes.