The National Economic Council (NEC) on Thursday approved the proposed Nigeria Voluntary Asset and Income Declaration Scheme (VAIDS) which will take off May 1, 2017.
It is expected to yield about $1billion to the Federal Government’s purse.
The Chairman of the Federal Inland Revenue Service (FIRS), Babatunde Fowler, disclosed this to State House correspondents at the end of the NEC, chaired by Vice President Yemi Osinbajo.
He was joined at the briefing by Abia State Governor, Okezie Ikpeazu and Deputy Governor of Kaduna state, Bala Bantex.
He said that the scheme will capitalize on the considerable international goodwill already built by President Muhammadu Buhari in his mission to rebuild Nigeria.
The policy, he said, was necessitated by the under payment of tax via the use of Tax Havens and other evasion strategies, which he noted has not been helpful to Nigeria.
According to him, the practice has been principally perpetrated by multi-national companies and high net worth individuals, making Nigeria to have the lowest non-oil tax to GDP at 6%.
He said that the policy will also capitalize on the current global movement against tax evasion and illicit financial flows and will offer a window for those who have not complied with extant tax regulations to remedy their position by the provision of limited amnesty to enable voluntary declaration and payment of liabilities.
He said the VAIDS scheme targets to increase the tax to GDP ratios to 15% from just 6% by 2020 while simultaneously generating revenue and encouraging investment and economic activity “as only 214 individuals in the entire country pay N20 million or more in tax annually.”
On the scope of the programme, Bowler said: “VAIDS scheme will embrace all Federal and States’ taxes such as Companies Income Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duties, Tertiary Education Tax, Technology Tax.
“The scheme is intended to cover all back taxes without any limit to time on how far back a tax assessment can go where a taxpayer has willfully defaulted.”
The FIRS boss said the scheme is targeted to run from May 1, 2017 for up to six months and incentives will be put in place to encourage early participation.
“Tax payers will be allowed up to 3 years to settle their liabilities. Revenue expected from the scheme conservatively estimated at US$1 billion,” he stated.
On the role of state governments, he said that based on initial estimates, it is anticipated that at least 50% of the funds recovered will belong to states who are the ultimate collectors of personal income taxes.
Kaduna State Deputy Governor said that the National Security Adviser (NSA), Babagana Munguno, briefed the Council on the security situation in the country with particular reference to Boko Haram insurgency in the North-East, cattle rustling, ethnic militias/security outfits, kidnapping, among others,.
According to him, the NSA blamed the situation on unemployment, which he said was a major security threat.
He also said that the Council has agreed to hold an extra-ordinary session to discuss security matters especially as it has to do with the economy.
Abia State governor, who spoke on deforestation in the country, said that the Council backed suspension of temporary wood export from the country.
It was also disclosed that NEC received report of Excess Crude Account as at 15th March, 2017, which stood at US$2, 45,864,724.59, recording a marginal increase of US$2,458,382,882.03.