The Minister of Finance, Budget and National Planning, Zainab Ahmed, has disclosed that the Federal Government made use of the Voluntary Assets and Income Declaration Scheme (VAIDS) programme to raise over N70 billion from Nigerians.
The VAIDS programme was launched to encourage individuals and companies yet to declare their assets and taxes to come forward without prosecution from the tax administrator. This was a strategy deployed by the government to widen the tax bracket in the country.
Speaking on the essence of VAIDS programme, Ahmed said, “data from the VAIDS Tax Amnesty programme has since generated over N70 billion in terms of tax revenue; in underpaid taxes and significantly increased the quantum of previously undeclared, but taxable assets.”
“Project Lighthouse continues to illuminate the grey areas where non-compliant taxpayers reside’’. She further explained that the inauguration of the Tax Appeal Tribunals (TATs) “have identified new cases, so they’ve reported 78 new TAT appeals with a disputed value of N73.3 billion and USD19.5 million.”
According to her, the TATs have resolved over 67 appeals with a disputed tax value of over N328.8 billion and USD6.6 billion.
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FG’s aggressive tax reform: Tax collection has been one of the major revenue sources for President Muhammadu Buhari-led administration. His government has been trying to expand the tax net and rate as well.
Recently, President Buhari signed the Financial Bill into law. While the bill encourages the growth of Micro, Small and Medium Enterprises (MSMEs), it also introduces an increase in the Value-Added Tax (VAT) rate from 5% to 7.5%. The Federal Government plans to use the 2020 Finance Bill to raise N8.155 trillion as it moves to implement the tax reforms.
The aggressive tax revenue gathering and FG’s tax reform are reportedly in favour of Nigerians. According to Ahmed, majority of the revenue will be going to the state and local governments. While 15% of the capital will go to the Federal Government, local governments will get 35% and 50% will go to the states.
Failure to meet tax revenue projection was cited as one of the reasons President Buhari didn’t reappoint Babatunde Fowler, the former Executive Chairman of the Federal Inland Revenue Service (FIRS). He was replaced after not the projections for over three years.