President Muhammadu Buhari on Wednesday approved extension of Voluntary Assets and Income Declaration Scheme to June 30, 2018.
According to a statement by Special Adviser to the President on Media and Publicity, Mr. Femi Adesina, the short extension after the original March 31 deadline expired was based on appeals by professional bodies and individual taxpayers.
Adesina quoted the President as saying that no further extension of time would be approved after June 30.
He further quoted Buhari as explaining that the new deadline was given based on the conviction of Ministry of Finance that the overall objective to increase compliance would be attained and additional revenue would accrue to the government.
The presidential spokesman indicated that a fresh Executive Order would be made to give legal backing to the new timeline.
He quoted the President as saying, “For a nation of people, who are competitive and driven, it is not a pride that we are the lowest performer in tax to GDP, not just in Africa, but in the world. Nigeria’s growth needs are such that every Nigerian must do their duty to their nation, neighbour and themselves.
“Hiding monies overseas, evading taxes by manipulation, and other unwholesome practices have never developed a country, and for Nigeria to attain her true potential, these must stop.”
Buhari urged Nigerian companies and individuals to join the government in the rebuilding mission “and do the right thing by taking this window of extension to regularise.”
He added that the right thing might not be convenient or comfortable, “but in the long run, we will all have a nation we can be proud of.”
The President further urged tax authorities to use the extension window to perfect plans to prosecute those who failed to regularise their tax status.
VAIDS is one of the key policies being used by the Federal Government to reposition the Nigerian economy and correct inherited underdevelopment.
The country has one of the lowest tax collection rates in the world at just six per cent of Gross Domestic Product.
“This was partially a function of the reliance on oil that saw us abandon the historical revenue collection systems and switch to a culture of sharing resources, rather than generating them,” the President added.
Buhari had last year launched Economic Recovery and Growth Plan and VAIDS as a tax amnesty programme as the first in the series of reforms that would transform the country’s tax system and provide sustainable and predictable funding for all tiers of government.
The statement added, “Tax revenues will ensure that public infrastructure is provided and public services are funded to improve the lives of the people.
“Taxes redistribute wealth from those who have more to those who have less, and VAIDS is one of the windows to achieve such.”
Executive Chairman, Federal Inland Revenue Service, Mr. Babatunde Fowler, had disclosed earlier last month that N20bn had so far been realised from 262 taxpayers who declared their assets under VAIDS.
Before the extension of the deadline, VAIDS offered a grace period of nine months from July 1, 2017 to March 31, 2018 for tax defaulters to voluntarily pay back to the government what they owed.
In exchange for full and honest declaration, the government promised to waive penalties that should have been levied and the interest that should have been paid on overdue taxes.
Also, those who declare their tax obligations honestly will not be subjected to any investigation or tax audit after the new grace period.
A tax expert and economic analyst have described the extension of the tax amnesty scheme as a good development.
Principal Partner, ROAC, a leading accounting and tax advisory firm, Mr. Gbenga Akinyemi, said the extension was a win-win situation for both the tax authority and taxpayers.
“It will afford those who for one reason or the other failed to meet the deadline to escape the payment of penalty. The good thing again is that for companies whose financial year ends on December 31, the deadline for submission of annual tax returns is June 30. It will also help the government to bring more people into the tax net,” he stated.
Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, advised the Federal Government never to entertain a further extension of the deadline, pointing out that citizens might continue to take things for granted if it was extended again.
Chuwku said, “The extension provides an opportunity for those who have not complied to comply. There is also a need for enforcement, otherwise you may be dealing with recalcitrant people.
“The point is that if we keep extending, people may keep deferring it. I feel the government should have started sanctioning defaulters. But since the government in its wisdom has done it, I advise that there should not be a further extension. Because sanctions are hardly imposed in our clime, people take things for granted.”