VAIDS IN NIGERIA
What do you reall know about VAIDS in Nigeria?
Table of Contents
- 1 WHAT IS THE FULL MEANING OF VAIDS?
- 2 THE PURPOSE OF VAIDS
- 3 PENALTIES FOR THOSE WHO REFUSED THE DECLARATION BEFORE DEADLINE
- 4 WHEN IS DEADLINE FOR VAIDS IN NIGERIA DECLARATION?
- 5 FREQUENTLY ASKED QUESTIONS ON VAIDS IN NIGERIA
- 6 ELIGIBILITY STATUS PARTICIPANT ON VAIDS IN NIGERIA
- 7 ADVANTAGES OF VAIDS TO THE PAYERS
- 8 WHAT SHOULD TAXPAYERS DO?
- 9 MUST I BE RESIDENT IN NIGERIA BEFORE I CAN PARTICIPATE IN VAIDS IN NIGERIA?
WHAT IS THE FULL MEANING OF VAIDS?
VAIDS stands for Voluntary Assets and Income Declaration Scheme. It was launched on June 29, 2017 by Vice President Yemi Osinbajo (at the time he was serving as the acting president). The purpose is to allow Nigerians honestly declare their assets and pay their taxes appropriately within the period between July 1, 2017 and March 31, 2018 which is the deadline, when there will be no penalties of any sort.
VAIDS is an initiative planned to encourage voluntary disclosure of previously undisclosed assets and income for the purpose of payment of all tax liabilities. The Scheme is expected to be executed by the Federal Inland Revenue Service (FIRS) in association with all 36 State Internal Revenue Services and the FCT Internal Revenue Service (IRS).
Government would gather intelligence locally and through various international conventions and multilateral agreements to gather the information needed for sanctioning or prosecution of erring taxpayers or those who make false declarations. An international organization and asset tracing company has been engaged to support this process for effective services.
THE PURPOSE OF VAIDS
1: VAIDS came up as a result of the fact that there is the need to increase Nigeria’s tax to GDP ratio from the 6% it is
currently to 15%.
2: To Stop tax evasion.
3: To increase the national tax base.
4: To put an end to non-compliance of existing tax laws.
5: Abolishing illegal financial cash flows in the country.
PENALTIES FOR THOSE WHO REFUSED THE DECLARATION BEFORE DEADLINE
Those who refuse to comply with the VAIDS declaration before the deadline will incur the following punishment on themselves;
1: Imprisonment up to five years.
2: Taxpayers who fail to voluntarily declare their assets will be investigated and prosecuted criminally.
4: The Ministry will also publish the list of tax defaulters and evaders in what is termed as a ‘name and shame’ list.
4: Overdue charges for defaulters and invaders.
5: No or less forgiveness for invaders.
WHEN IS DEADLINE FOR VAIDS IN NIGERIA DECLARATION?
The declaration which started March 29th 2017 is to end on March 31st 2018 though, according to President of the Chartered Institute of Taxation of Nigeria (CITN), Mr. Cyril Ede, he wants an extension of the date but The Executive Chairman of the Federal Inland Revenue Service (FIRS), Mr. Tunde Fowler, stated this on 9th November 2017 in Abuja at a VAIDS training programme, while responding to the request made by Mr. Cyril Ede, said there is no extension in the date. He therefore urged all individuals and organizations to declare their assets and pay appropriate taxes before the March 31, 2018 deadline, when there will be no interests, penalties, tax audits and
prosecution. According to Mr. Fowl, individual or organization that doesn’t declare before the stipulated time will incur severe punishment.
FREQUENTLY ASKED QUESTIONS ON VAIDS IN NIGERIA
HOW/WHERE CAN I DECLARE MY VAIDS?
You can declare you VAIDS in their offices.
You can declare through their official website: vaids.gov.ng. You can get their form at any revenue office.
WILL VAIDS DECLARATION DATE EXPIRE ON 31ST MARCH 2018 AS SAID ON THE 9Th NOVEMBER 2017 OR WOULD THERE BE AN EXTENSION?
Well, to answer the question correctly as regards the recent update from VAIDS, VAIDS office in the Federal Ministry of Finance has identified thousands of tax defaulters across the country and has written to them, requesting
compliance before the expiration of the declaration period on March 31. According to the VAIDS office, the defaulters, mostly high net-worth individuals (HNIs), were identified through transaction, income and assets data
obtained from a variety of sources like Corporate Affairs, Federal Inland Revenue Service (FIRS), Central Bank of Nigeria, Nigerian Communications Commission (NCC), state governments, Nigerian Customs Service, land registries etc.
Conclusively, VAIDS has no extension date other than the stipulated date of expiration which is March 31st 2018. Individual or organization that refused to declare is subject to punishment and humiliation from VAIDS.
ELIGIBILITY STATUS PARTICIPANT ON VAIDS IN NIGERIA
If you find yourself among those group listed below then you are an eligible participant of VAIDS. The eligible participants are those who have been or maybe;
1. Earning an income or owning an asset but is yet to register with the authorized tax authorities;
2. Registered taxpayers who have additional disclosures to make or need to amend prior disclosures; and/or are
registered but have not been filing returns;
3. Businesses who have not been totally declaring their taxable income and assets;
4. Businesses who have not been paying or remitting at all or are underpaying or under remitting;
5: Businesses under a process of tax audit.
6: Businesses that have tax disputes with any tax authority and are ready to settle the tax dispute out of court.
ADVANTAGES OF VAIDS TO THE PAYERS
The following are the benefits of VAIDS to the taxpayers;
1: The taxpayers who voluntarily declare their assets will enjoy great interest and freedom from being penalized by the authority for being obedient to the law and constituted authority.
2: Also the tax payers will be excluded from tax audits within the period in consideration.
3: The taxpayers have the opportunity to make known the payment of their great tax liability over three years stipulated or period.
4: Freedom from harassment if not paid. Those who paid will be free to go about their individual businesses while those who refused will be troubled and harassed until payment is made.
WHAT SHOULD TAXPAYERS DO?
Before you can venture into the declaration forms, there are some questions you need to ask yourselves and possibly reason out the answers.
These questions are:
1: Has my returns been filed within the period of 2011 to 2016?
2: Was full disclosure made on my incomes in the returns so filed?
3: Do I have assets outside the country that generated revenue for me, and I’ve disclosed such
4: Have I been providing limited information to the tax authorities so as to reduce my tax liabilities?
5: Can I defend with proper documents the income displayed in my tax clearance certificate in the last years?
6: Do I enjoy personal gains from my employment in which tax has not been paid?
7: Do I own assets by proxy and would like to declare these assets?
8: Is my company currently undergoing back and forth with respect delay in tax audit?
If this questions speak of you then VAIDS is the right option for you.
MUST I BE RESIDENT IN NIGERIA BEFORE I CAN PARTICIPATE IN VAIDS IN NIGERIA?
The program is available to everyone who is eligible for tax in Nigeria. It covers Nigerian residents who had taxable
undisclosed income outside Nigeria and non – residents who earned undisclosed income derived from Nigeria.
Those who are in the Diaspora are encouraged to make an online disclosure, or to appoint a local agent to make the appropriate declaration on their behalf.