In a bid to grow Nigeria's tax revenue and raise non-oil tax
to GDP ratio from current level of 6% to 15% by 2020, a Voluntary
Asset and Income Declaration Scheme (VAIDS) is to be implemented.
The National Executive Council (NEC) has granted
approval-in-principle for this new scheme subject to finalisation
of the broader framework.
The primary objective of VAIDS is to encourage voluntary
declaration of undisclosed income and assets with consequential
payment of applicable tax liabilities over a defined period. It is
expected that this window offered to those who have not complied
with extant tax regulations will simultaneously generate revenue
and encourage investment and economic activity. An estimated
revenue of US$1 billion is projected from the scheme.
Key highlights of VAIDS include:
the scheme is expected to kick off from 1 May 2017 with incentives
put in place to encourage early participation.
Taxes covered: all
taxes collectible by the State and Federal Governments are covered
by the scheme. This includes Companies Income Tax, Personal Income
Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duties,
Tertiary Education Tax, Information Technology Levy.
the window will be opened to all back duty taxes with no limitation
as to how far back.
Timeframe for declaration and
payment: taxpayers who sign up to the scheme will be
allowed a maximum timeline of three years to spread the payments of
applicable to all taxpayers, with key focus on multinationals and
high net worth individuals.
It is expected that the final framework will address other
issues such as:
application and participation
incentives for early adoption by
modalities for installment payment
impact on on-going tax audits and
It will be recalled that the Federal Inland Revenue Service
introduced a similar program in 2016 which was claimed to have
raised substantial revenue for the government. It will therefore be
interesting to see the potential impact of VAIDS which appears to
be broader in scope. Perhaps, the revelation by the Government that
only 214 individuals pay more than N20million in annual personal
income tax in the entire country is about to change for the
We will continue to monitor developments in this space and
update you as further facts become available. In the meantime, we
advise taxpayers to consider a tax health check and evaluate
potential tax exposure with the aim of closing any identified
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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