- Rejects Deadline Extension For Tax Evaders
BY CHINYERE OBIORA, LAGOS – The Federal Government has commenced the distribution of letters to about 500 prominent Nigerians with property and trusts abroad to determine their tax compliance status in the country.
Minister of Finance, Mrs Kemi Adeosun dropped the hint at a tax stakeholders forum in Lagos, saying that; “The first 500 letters are ready and will go out this week but there are many more.”
She however explained that “receiving the letter is not an accusation of deliberate wrongdoing but rather a notice that the data suggests possible underpayment and a prompt to check compliance.”
Also, the Minister said over 2,190 Community Tax Liaison Officers (CTLOs) have been recruited and trained as part of the Federal Government initiative to recalibrate the nation’s tax system and boost its revenue streams going forward.
She said the CTLOs’ recruitment and training are under the Voluntary Assets and Income Declaration Scheme (VAIDS), an initiative of the Federal Ministry of Finance in collaboration with the State Tax Authorities.
Similarly, she confirmed that a review of the tax profiles of companies that got major payments from the Federal Government in the last five years is currently in place with the aim of sanitising the system.
Speaking at a workshop by the Federal Ministry of Finance, Federal Inland Revenue Service (FIRS) and Joint Tax Board (JTB) for lawyers, accountants and other professionals advising clients on participation in the VAIDS, Mrs Adeosun stated that a total of 1,710 CTLOs have been deployed to 33 States, out of 2,190 tax officers recruited and trained to raise awareness about the scheme and taxation in general.
Oluyinka Akintunde, Special Adviser, Media and Communications to the Minister of Finance, said in a statement that the CTLOs are currently operating in Adamawa, Cross River, and Delta. Others include; Edo, Enugu, Kaduna, Kwara, Lagos, Nassarawa, Niger, Ogun and Oyo states.
According to the statement, job creation is one of the spin-offs of the VAIDS initiative, with the scheme expected to create a total of 7,500 opportunities for Nigerians as CTLOs through the N-Power scheme of the Federal Government.
The statement also described VAIDS as a revolutionary programme that provides tax defaulters a nine-month opportunity to voluntarily and truthfully declare previously untaxed assets and incomes.
With March 31, 2018 set as deadline for the tax amnesty, Adeosun said there is no hiding place for tax evaders in Nigeria or abroad, explaining that government has evolved a data mining mechanism to fish out and sanction evaders.
“The unique cooperation between the various arms of Federal Government, State Governments and Foreign Governments has provided an unprecedented level of data that allows the Nigerian Government to profile taxpayers accurately and identify those whose lifestyle and assets are not consistent with their declared income.
“A lot of data mining is going on daily, both locally and internationally, on property ownership and other items. Data is an extremely powerful tool that is now being utilized. For instance, we have reviewed all companies that received major payments from the Federal Government in the last 5 years and found that even those who made money from government, under-declared”, she said.
Explaining that the government’s tax compliance team had looked at import records and compared the value of goods imported to the tax declarations of the importers, she said the discovery was worrisome as “the variance was disturbingly wide”.
On work so far done to re-jig the tax system, the Minister said; “On personal income taxes, we reviewed property and company ownership as well as registration of high value assets and foreign exchange allocations, which gives us a sense of the lifestyles of the persons.
“But again, we found major non-compliance. In some cases, people declared as little as N10 million as income but purchased expensive property overseas and in Nigeria, registered high specification vehicles and funded luxurious personal events costing multiples of the declared income.”
“We have blocked a major loophole by using data to profile tax payers. Thus, someone owning properties across multiple states and overseas can selectively declare knowing that tax authority had no means of cross checking.”
She added that; “This is especially the case with overseas assets and income where State Governments lacked jurisdiction. But with the centralisation of data under Project Lighthouse within the Federal Ministry of Finance, a major loophole has been plugged.”
Adeosun said government would not back down on its resolve to prosecute tax evaders after the tax amnesty deadline, just as she charged all professionals to advise their clients to uphold honesty in declaring their assets and income as well as regularising their tax status.
On the compiled list of 500 prominent Nigerians, expected to receive their letters beginning from Monday, November 27, 2017, Adeosun said the purpose is for them to embrace the tax amnesty and regularise their tax status as to avoid prosecution and fines.
Maintaining that non-receipt of a letter does not mean government has not identified a potential evader, the Minister said; “It is premature to call such persons tax evaders as there are many reasons that taxpayers may have failed to comply. We will only label people as real tax evaders when the amnesty deadline expires and they have failed to regularize. Such persons can then legitimately be called tax evaders, as their non-participation in VAIDs indicates that they are willful tax evaders. We will then proceed to apply the full weight of the law.”
According to her, “We are sending out thousands of letters to those in the high risk categories but our advice is that every person and every company should do a self-assessment and take advantage of VAIDs to correct any under declaration, irrespective of whether they get a letter.”
