FG decries low tax revenues, anticipates positive impact of VAIDS

*As Nigeria records lowest tax to GDP ratio at 6%

The federal government has again lamented the nation’s low tax revenues over the years, but believed that the newly launched Voluntary Asset and Income Declaration Scheme (VAIDS) is capable of correcting Nigeria’s poor tax contributions to Gross Domestic Product (GDP) ratio.

Considering Africa’s largest economy tax to GDP ratio, which stood at just 6 per cent, representing one of the lowest in the world compared to India’s of 16 per cent, Ghana’s of 15.9 per cent and South Africa’s 27 per cent even as most developed nations have tax to GDP ratios of between 32 per cent and 35 per cent.

But speaking on behalf of the FG, Minister of Finance, Mrs. Kemi Adeosun, anticipated that VAIDS would regularise and encourage defaulting Nigerian taxpayers to work out a flexible way to pay their tax liabilities due from the last six relevant tax years.

Mrs. Adeosun, who disclosed this after the launch of the VAIDS by the Acting President, Professor Yemi Osinbajo,noted that the scheme offers a 9-month window to allow Nigerians who may have evaded tax, whether ignorantly or deliberately, in the past six years, the opportunity to do their civic duty and pay the correct taxes, thereby avoiding criminal prosecution at the expiration of the scheme.

She explained that at variance with the lifestyles of a large number of Nigerians and with the value of assets known to be owned by Nigerians resident around the world, there has been a systemic breakdown of compliance with the tax system with various strategies used to evade tax obligations.

According to her, these include but are not limited to, transfer of assets overseas, the use of offshore companies in tax havens to secure assets and the registration of assets in nominee names.