.No more shelter in offshore tax havens
BY COBHAM NSA, ABUJA – The Minister of Finance, Mrs Kemi Adeosun said there will be consequences and criminal prosecution of tax defaulters that snub Federal Government’s offer of tax amnesty.
She said aside from sanctions that include full payment of outstanding tax liability, businesses involved in dishonest compliance will also be liable as whatever is paid on the declared liabilities may be considered as part-payment of the outstanding sum later discovered by the authorities.
Mrs Adeosun equally urged Nigerians to support any planned review of existing tax schemes, including those in offshore tax havens, to take advantage of the Voluntary Assets and Income Declaration Scheme (VAIDS) aimed at regularising tax status where necessary.
Speaking at a media interactive session in Abuja on Tuesday, the Minister said Nigerians must cooperate with government by paying right taxes to provide the much needed funds for both Federal and State Governments to improve the citizens’ living standards.
On legality of offshore tax shelters, Mrs Adeosun said though using tax avoidance schemes was legal; tax evasion was criminal, noting that; “The critical question to be asked of all Nigerian tax payers using offshore tax shelters will be whether all applicable taxes have been paid prior to the transfer of funds or assets to a tax shelter.”
According to her, “If all taxes had been paid, then there will be no additional liability except tax payable on further income earned on those funds. However, if taxes had not been paid, then the use of such schemes is illegal.”
She charged users of such structures to seek expert advice, especially from the Federal Ministry of Finance that offers free training to professional advisers on VAIDS to enable them support their clients.
The Minister also urged users of offshore tax shelters to promptly embrace the VAIDS scheme to regularize their tax status, noting that Nigeria’s low tax revenues were at variance with the lifestyles of so many people as well as the value of assets owned by Nigerians resident across the globe.
She stated that; “VAIDS ushers in an opportunity to increase the nation’s general tax awareness and compliance. It is a time-limited opportunity for taxpayers to regularise their tax status relating to previous tax periods.
“In exchange for fully and honestly declaring previously undisclosed assets and income, taxpayers will benefit from forgiveness of overdue interest and penalties, and with further assurance that they will not face criminal prosecution for tax offences or be subject to tax investigations.”
The Finance Minister also said with the rising global focus on illicit financial flows and tax evasion, offshore tax shelters no longer offer robust protection against tax authorities.
For Mrs Adeosun, dependence on such schemes now poses enormous risks for the users, even as she maintained that leaks by Panana Papers and Paradise Papers were just the beginning of what is likely to become a systematic unravelling of illicit offshore tax haven system.
The Minister’s position conveyed in a statement by her Special Adviser, Media and Communications, Oluyinka Akintunde also assured that the Federal Ministry of Finance’s data mining project would use data provided on Nigerians from such leaks to crosscheck tax declarations.
Established on June 29, 2017 through an Executive Order signed by Vice President Yemi Osinbajo (then Acting President), VAIDS is a broad-spectrum solution to basically all noticeable defects in the country’s tax system, including negativity towards taxation.
The first phase of VAIDS flagged-off on July 1, 2017 with the second phase expected to end on March31, 2018. The Federal Government has continued to promote job creation as one of the spin-offs of the VAIDS initiative, with the scheme expected to create a total of 7,500 opportunities for Nigerians as Community Tax Liaison Officers (CTLOs) through the N-Power scheme.
