The Minister of Finance, Mrs Kemi Adeosun, on Tuesday, said that the government would investigate high networth individuals and companies who frequently used offshore tax havens.
Adeosun said this in an interactive session with the media on Tuesday in Abuja, while responding to questions on the use of offshore jurisdictions with favourable tax laws.
She said that with the increasing global focus on illicit financial flows and tax evasion, offshore tax shelters no longer offered robust protection against tax authorities.
She, therefore, added that the continued use of such schemes posed enormous risks for the users.
On questions relating to the recent leaks by Panama Papers and Paradise Papers, the minister remarked that the leaks were just the beginning of what was likely to be a systematic unraveling of the offshore tax haven system.
According to her, the Federal Ministry of Finance’s data mining project would use data provided on Nigerians from such leaks to crosscheck tax declarations.
She advised Nigerians to review any existing tax planning schemes, including those in offshore tax havens, to take advantage of the Voluntary Assets and Income Declaration Scheme (VAIDS) to regularise their tax status where necessary.
“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.
“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 said.
Adeosun urged users of offshore tax shelters to promptly embrace the VAIDS scheme to regularise their tax status.
She said also that Nigeria’s low tax revenues were at variance with the lifestyles of a large number of its people and with the value of assets known to be owned by Nigerians resident around the world.
” 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.
“They will also have further assurance that they will not face criminal prosecution for tax offences or be subject to tax investigations,” she said.
She urged Nigerians to cooperate with the government by paying the right taxes to both the Federal and State Governments, to provide the much-needed funds that would improve the lives of Nigerians.
The minister said that sanctions awaited defaulters who refused the Federal Government’s offer of tax amnesty, including the full payment of outstanding tax liability and criminal prosecution.
She said further that businesses, which untruthfully complied, would be liable as whatever was paid on the declared liabilities might be considered as part-payment of the outstanding sum later discovered by the authorities.
On impetuous defaulters who failed to utilise the VAIDS window, Adeosun said such offenders would face criminal prosecution by the Federal Government.
The Paradise Papers is a collaborative investigative report by more than 380 journalists in 67 countries, using leaked data obtained by German newspaper, Suddeutsche Zeitung, and the International Consortium of International Journalists (ICIJ).
The data was obtained from two offshore secrecy providers; Appleby and Asiaciti Trust and 19 secrecy jurisdictions around the world.
The leaked 1.4 terabyte data, now dubbed Paradise Papers, contains 13.4 million records and is no doubt one of the biggest leaks in history.
The report identified more than 120 politicians and country leaders, in nearly 50 countries including Nigeria, as well as hundreds of business people across the world as users of offshore entities.
Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.