Minister of Finance, Kemi Adeosun, says the Voluntary Assets and Income Declaration Scheme (VAIDS) is supported by the existing tax laws in the country.
Adeosun made this known on Thursday evening while speaking on Channels Television’s Core programme.
The minister noted that VAIDS is a tax amnesty scheme, which offers people with tax compliance issues the chance to declare honestly in exchange for waivers such as tax audit, interests on owed taxes and freedom from prosecution.
“In terms of the legal underpinning, we have not passed any new law. The law has always been there and what we are doing is to recognise the extent of the non-compliance.
“The extent of the non-compliance is so huge that the best thing to do is to allow people to come and regularise. When you have a Tax-to GDP ratio of six percent, it is not because you don’t have tax laws, it’s because people are not complying. There has been no consequence for not complying in the past,” she said.
Adeosun further added that the best remedy for non-compliance is to allow people to voluntarily declare.
“So the legal underpinnings are the existing tax laws such as Personal Income Tax Act, Company Income Tax Act, VAT Act and then supplemented with an Executive Order that gave us the authority to waive interest and penalties. We needed the Executive Order to enable us to waive the penalties since they are prescribed by law,” she said.
She explained that VAIDS is distinct and conceived to rescue the country from the near-total dependence on oil revenues.
The minister said the Federal Government, over the last two years, which took in the dip in oil prices and recession, had to borrow money.
“We had challenges and many states couldn’t pay salaries. It was a wake-up call for everybody that we can’t rely on oil anymore. We did the analysis of our economy and we said: ‘Look, oil is only nine percent of our economy
“What about that remaining 91 percent? What is it contributing? Why is our tax revenue so low? That was the prompting. The other issue is that data was going to be available under the Automatic Exchange of Information and BVN; suddenly we could see taxpayers more clearly,” she stated.
In the past, the minister said, the tendency for most people was not to declare at all or under-declare because the government had no means of checking. This she said was no longer possible because of the availability of data from many sources.