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How Nigeria’s VAIDS Fights Corruption/ Global Implication of VAIDS – A major goal of Nigeria’s Voluntary Assets and Income Declaration Scheme(VAIDS) is to fight corruption. There has been a corruptive, systemic breakdown of compliance with the tax system in Nigeria. Compliance with Federal Inland Revenue Board (FIRB) and State Internal Revenue Board (SIRB) tax regulations, laws, procedures and directives have not been very adequate in the recent past.
Your Tax Compliance Matters! How?
Nigerians use every available strategies to evade tax obligations. This is not good of you. The tax evasion strategies you use may include; non-disclosure of income or partial disclosure of income and or overstatement of allowable expenses and other non-taxable allowances. Some of you go as far as claiming for unallowable expenses which engender tax audits which is an addition to compliance cost. Others sharp practices include transfer of assets overseas, the use of offshore companies in tax havens to secure assets, and the registration of assets in nominee names.
How Nigeria’s VAIDS Fights Corruption/ Global Implication of VAIDS
This Anti-Corruption article based on VAIDS is for You!
The questions to answer in this post are: How will VAIDS fight corruption for Nigeria? Why is Nigerian government implementing VAIDS now? What international implications has it? The interested parties here include taxpayers, accounting and taxation professionals, students of these professional bodies and the general public.
In this article are 8 reasons why Nigerian government is implementing VAIDS now. It’s also 8 reasons why you must take up the opportunities provided by VAIDS to escape “Name and Shame” shows that follow after the programme ends.
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How Nigeria’s VAIDS Fights Corruption/ Global Implication of VAIDS
(1) The Global War on Illicit Funds transfers: What About It?
The recent global initiative to expose sources of illicit funds globally is a scheme to note. There is, therefore, currently a global initiative to tackle the problem of illicit financial flows and tax evasion, which has contributed to the underdevelopment of many countries, Nigeria inclusive.
VAIDS publication carries a report by former South African Premier, Thabo Mbeki on this matter. The survey found out that the amount of illicit financial flows out of Africa exceeded the amount of development aid that Africa receives. It explains that Nigeria has the highest level of illicit financial outflows in Africa.
If you embrace VAIDS this global war will not hit you. Remember that VAIDs has a segment of “Name and Shame”.
(2) Global Support to Rebuild Nigeria:
As part of the global support to rebuild Nigeria, the Government has secured the co-operation of a number of nation states in its quest to repatriate illicit funds due to it. The various bi-lateral and multi-lateral agreements will certainly expose sources of illicit funds being transferred amongst the countries in question and cooperate with Nigeria in repatriating such funds.
(3) Automatic Exchange of Information (AEI): This will also expose you!
Nigeria has also signed agreements with a number of nations, which provide for the Automatic Exchange of Information (AEI). Countries who are party to this agreement include Switzerland, Panama, the Bahamas and other tax havens.
(4) Common Reporting Standards (CRS): No Hiding Place Again for Illicit Funds.
Banks are going to share information commonly globally. Banking information will easily be shared across countries due to newly implemented Common Reporting Standards (CRS).
(5) Tax Information Country-by-Country reporting standard: How does it work?
On 16 August, 2022 the Federal Executive Council approved Nigeria’s participation in the Country-by-Country reporting standard. This will provide tax authorities with greater transparency into the scale of multinational company operations, and enable increased detection of profit shifting and other tax evasion strategies.
(6) Beneficial Ownership Register Reveals Property Owners in UK
Nigeria has also signed up for the establishment of the Beneficial Ownership Register at the Anti-Corruption Summit in London in 2016. This will give Nigeria access to true owners of properties in the UK and other participating countries.
(7) Inter-Agency Cooperation in Nigeria:
Within Nigeria, recent reforms provide additional information to the tax authorities. There is now increased inter-agency cooperation providing information from BVN, NFIU, State Land Registries, CAC, and other agencies to create an accurate financial picture of Nigeria’s tax payers.
How Nigeria’s VAIDS Fights Corruption/ Global Implication of VAIDS
(8) International Asset Tracing Professionals:
Lastly, the asset tracing team of the Federal Ministry of Finance has engaged international asset tracing professionals who have been gathering information on individuals and companies. Information so far gathered suggests that the level of non-tax compliance in relation to these properties is very significant.
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The Way Out!
In conclusion, the Voluntary Assets and Income Declaration Scheme ( VAIDS) is offering you an opportunity to voluntarily regularize your tax status. I have taken time to explain to you, why Nigerian government is implementing VAIDS now. Majorly, it’s to give you opportunity to avoid the “Name and Shame” parade that may follow after the tax amnesty period elapsed by 30th March 2023.
You don’t need to be told again that the international or global approach will certainly not hide any one.
How Nigeria’s VAIDS Fights Corruption/ Global Implication of VAIDS
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Deacon Anekperechi Nworgu, a seasoned economist who transitioned into a chartered accountant, auditor, tax practitioner, and business consultant, brings with him a wealth of industry expertise spanning over 37 years.
