The Federal Government says it has commenced the exchange of information and data on overseas asset and foreign accounts held by Nigerians abroad.
Minister of Finance, Kemi Adeosun, said the exchange under the Automatic Exchange of Tax Information, AETI protocol has since taken off with some foreign governments, particularly the United Kingdom.
The Minister disclosed this on Friday in Abuja during the presentation of progress report on Tax Laws Reform by the Vice Chairman of the National Tax Policy Implementation Committee, Taiwo Oyedele.
“The data received in Nigeria with regard to overseas assets held by Nigerians has been impressive and will underpin a long term improvement in the nation’s tax to Gross Domestic Product, GDP ratio, and in turn improve life for the masses,” the Minister said.
“The data on bank accounts, property and trusts, which have come automatically from a number of countries is being used to support the Voluntary Assets and Income Declaration Scheme, VAIDS by allowing the tax authorities to check the accuracy of declarations received.
“The Federal Government is also using the data to generate ‘nudge’ letters, which are being sent to those identified as potential tax defaulters.”
Mrs. Adeosun said Nigeria had written to a number of countries to request specific information about offshore trusts and bank accounts held by its Nigerians.
She advised users of offshore structures to take advantage of VAIDS to regularise their taxes before the expiration of the amnesty window.
VAIDS was launched on July 1, 2017 to provide taxpayers with undisclosed income and assets opportunity to regularise their tax status. The one year amnesty period is expected to end by March 31, 2018.
The Minister said the offshore tax shelter system was basically over, pointing out that those who have hidden money overseas were being exposed.
She said while Nigerians have the legal right to keep their money anywhere in any part of the world, “they must first pay any tax due to the Nigerian Government so that we can fund the needs of the masses and create jobs and wealth for our people.”
“The moral argument against illicit financial flows and tax evasion and the strong international co-operation are such that every Nigerian tax payer should do the right thing. The needs of our people for development override any other argument against payment of tax,” the Minister stated.
Mrs. Adeosun stressed the need for a sustainable revenue that could deliver infrastructural development for Nigeria and improve the tax to GDP ratio of the country.
The Minister expressed satisfaction with the data being supplied to Nigeria by foreign countries under the AETI, to which the country became a party in January 2018.
On the review of tax laws, Mrs. Adeosun assured that the Federal Government would continue to build a robust tax system and implement the recommendations by the National Tax Policy Implementation Committee, NTPIC on tax laws reform.
While presenting the report, the NTPIC Vice Chairman, Mr. Oyedele said the Committee in its assignment considered three major policy documents, namely the Economic Recovery and Growth Plan, ERGP, the National Tax Policy and Ease of Doing Business Plan.
Mr. Oyedele said the Committee agreed that tax reforms should align with overall government objectives as articulated in these documents, pointing out that every action or recommendations would promote and help realise overall objectives.
The Committee said it identified seven major tax areas capable of creating the highest impact to the economy. These include Company Income Tax, CIT, Value Added Tax, VAT, Customs & Excise Tariff, CET, Personal Income Tax, PIT, Pension Contributions, Industrial Development Income Tax Relief, IDITR and Tertiary Education Trust Fund.
Mr. Oyedele said the committee believes proposed changes to the tax laws would help increase and diversify government revenue, simplify paying taxes and doing business, promote micro, small and medium enterprises, protect most vulnerable persons in the society, and remove obsolete, ambiguous and contradictory provisions in the law.
In addition, he said the Committee was able to propose two executive orders on Value Added Tax Act (Modification) Order and Review of Goods Liable to Excise Duties and Applicable Rate Order.
Besides, five Amendment Bills were proposed in the areas of Companies Income Tax Act (Amendment) Bill, Value Added Tax Act (Amendment) Bill, Customs, Exercise, Tariff (Consolidation) Act (Amendment) Bill, Personal Income Tax Act (Amendment) Bill and Industrial Development (Income Tax Relief) Act (Amendment) Bill.