The Federal Inland Revenue Service (FIRS) has joined forces with the Joint Tax Board (JTB) in a bid to track down tax defaulters. The two are envisioning an enactment of what is regarded as a “full-scale enforcement exercise” that will see to punishing tax dodgers that have failed to put to good use, the absolution put in place by the Voluntary Assets and Income Declaration Scheme (VAIDS) created by the federal government.
Tax evasion has been a rampant issue in Nigeria’s business space. Numerous large and small scale enterprises have consistently evaded payment of taxes. In 2019, the Federal Inland Revenue Service (FIRS) documented that the country has lost over 2 billion Naira due to tax defaulters, as well as an alleged $176 billion by multinationals. Since then, there has been growing cases of tax evaders. These discrepancies are why the government birthed the VAIDS initiative. Even with the addition of this initiative, there hasn’t been major changes, as taxes are still being evaded.
An encompassing enforcement operation for tracking down defaulters to be enacted.
This was issued in a public notice titled, “Post VAIDS Enforcement and Prosecution Exercise”, which was signed by the Executive Chairman of the Federal Inland Revenue Service, Muhammad Nami and also doubles as the Chairman of the Joint Tax Board. According to these tax bodies, an all-encompassing enforcement operation, which includes due prosecution is set to be enacted immediately to track down the tax defaulters that failed to utilize the federal government’s VAIDS initiative.
Within the notice, it was asserted that the Joint Tax Board, in collaboration with the Federal Inland Revenue Service, upon the enactment of the enforcement exercise will see to defaulting taxpayers being assessed in accordance to the tax laws. The Joint Tax Board however urged taxpayers with existing liabilities as declared under the initiative, to pay up the outstanding liabilities in order to ensure that the reliefs granted by the VAIDS initiative is not withdrawn.
Huge liabilities stipulated for taxpayers that fail to comply with the scheme.
In retrospect, the Voluntary Assets and Income Declaration Scheme was in 2017 , introduced by the federal government with an extensive idea of providing an amnesty for both individual and corporate taxpayers that will see them pay up their outstanding taxes between 2010 and 2015. Those who utilized this initiative were to avoid any form of interest payments or prosecution for tax evasion over the maximum of three years, pending they do not have a court’s judgement concerning specific cases.
Per the notice, prosecutions were put in place as consequences for not adhering to this order. The executive order of the initiative however stipulated that those (individual and corporate taxpayers) that fail to comply with this scheme are to be faced with huge liabilities, which includes the liability of paying the full outstanding sum, as well as the prosecutions and interest that accumulated. It further includes a taxation audit for the taxpayer as well as relief forfeiture.
The post-VAIDS measure as an avenue for firms & individuals to declare assets.
Mohammad Nami noted that according to a data from the National Bureau of Statistics, there are over 65 million active businesses in Nigeria but less than 20 million have been actual taxpayers. He asserted that there was a need for enhancing the compliance gap with immense enforcement measures. He further added that going forwards, the post-VAIDS measure would serve as a viable avenue for individuals and firms to declare their assets and pay taxes, so as not to face the enforcement actions procured by the bodies in charge.
Related Link
FIRS: Website
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