BY EDMOND ODOK, ABUJA – Nigeria is collaborating with the United Kingdom (UK) Government and other foreign countries to exchange tax information on overseas assets currently held by Nigerians
Minister of Finance, Mrs Kemi Adeosun said the partnership, under the Automatic Exchange of Tax Information (AETI), will generate data for letters meant to encourage positive response from those identified as potential tax defaulters.
Mrs Adeosun said the Federal Government is so far satisfied with the data supplied to Nigeria by foreign nations under the AETI that the country signed onto in January 2018.
Speaking at the presentation of Progress Report on Tax Laws Reform by the Vice Chairman, National Tax Policy Implementation Committee (NTPIC), Mr. Taiwo Oyedele in Abuja on Friday, Mrs Adeosun confirmed that; “The data received in Nigeria with regard to overseas assets held by Nigerians has been impressive and will underpin a long term improvement in the nation’s tax to Gross Domestic Product (GDP) ration, in turn, will improve life for the masses.”
According to her, “The data on bank accounts, property and trusts, which has come automatically from a number of countries is being used to support the Voluntary Assets and Income Declaration Scheme (VAIDS) by allowing the tax authorities to check the accuracy of declarations received.”
She explained that the data acquired are being used by government to “generate ‘nudge’ letters which are being sent to those identified as being potential tax defaulters”, adding that, Nigeria has already written to some countries requesting specific information about offshore trusts and bank accounts held by its citizens.
Responding to questions during the report submission, the Minister urged users of offshore structures to embrace VAIDS and regularise their taxes before the expiry of the amnesty programme.
“The offshore tax shelter system is basically over. Those who have hidden money overseas are being exposed and whilst Nigerians can legally keep their money anywhere in the world, they must first pay any taxes due to the Nigerian Government so that we can fund the needs of the masses and create jobs and wealth for our people.
“The moral argument against illicit financial flows and tax evasion and the strong international co-operation are such that every Nigerian tax payer should do the right thing. The needs of our people for development override any other argument against payment of tax,” Mrs Adeosun said.
She said Nigeria needs sustainable revenue streams that would deliver infrastructural development and improve the country’s tax to GDP ratio, assuring that government is determined to build a robust tax system and implement the NTPIC’s recommendations on tax laws reform.
Speaking earlier, NTPIC’s Vice Chairman, Mr Taiwo Oyedele, said in arriving at its report, the Committee considered three major policy documents namely; the Economic Recovery and Growth Plan (ERGP), the National Tax Policy and Ease of Doing Business Plan.
Oyedele said the Committee agreed that tax reforms should align with overall government objectives as articulated in the documents, such that every action or recommendations would promote and catalyse the realisation of overall objectives.
He said the Committee also identified the seven major tax areas with potential highest impact, adding that these include: Company Income Tax (CIT); Value Added Tax (VAT); and Customs & Excise Tariff (CET). Others are: Personal Income Tax (PIT); Pension Contributions; Industrial Development Income Tax Relief (IDITR); and Tertiary Education Trust Fund.
Oyedele stated that among the specific objectives to be achieved by the proposed changes in tax laws are: increase and diversify Government revenue; simplify paying taxes and doing business; promote Micro, small and medium enterprises; protect most vulnerable persons in the society; and remove obsolete, ambiguous and contradictory provisions in the law.
The Vice Chairman also hinted that the Committee’s work resulted in two executive orders and five amendment bills. On the executive orders list are: Value Added Tax Act (Modification) Order; and Review of Goods Liable to Excise Duties and Applicable Rate Order.
The proposed Amendment Bills are: Companies Income Tax Act (Amendment) Bill; Value Added Tax Act (Amendment) Bill; Customs, Exercise, Tariff (Consolidation) Act (Amendment) Bill; Personal Income Tax Act (Amendment) Bill; and Industrial Development (Income Tax Relief) Act (Amendment) Bill
