Nigeria takes a bold step towards combating tax evasion

The battle of tax evasion in Nigeria is still ongoing as the Federal Inland Revenue Service has signed two major multilateral instruments. These instruments are the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) and the Common Reporting Standard (CRS) Multilateral Competent Authority Agreement‎ (CRS MCAA).

In addition to the voluntary asset and income declaration scheme (VAIDS) which aims to battle tax evasion, Nigeria has joined 71 other countries to sign the Multilateral instruments and the 94th jurisdiction to join CRS MCAA. This agreement signed in Paris gives Nigeria automatic exchange of tax and financial information among the 101 existing tax jurisdictions and also implement the automatic exchange of financial account information pursuant to the OECD/G20 Common Reporting Standard (CRS).

The CRS MCAA aims to implement the automatic exchange of financial account information pursuant to the OECD/G20 Common Reporting Standard (CRS) and to deliver the automatic exchange of CRS information between 101 jurisdictions by 2018.

Also, the scheme offers a window for those who, before now, have not complied with extant tax regulations to remedy their positions by providing them limited amnesty to enable voluntary declaration and payment of liabilities.

This agreement was signed by the chairman, Mr. Tunde Fowler, Executive Fowler signed the agreements on behalf of Nigeria in Paris, with Mr. Ben Dickinson, head of global relations and development division of the Organisation for Economic Cooperation and Development (OECD), in attendance.

According to the chairman, to improve tax compliance, the Federal Government said tax offenders stand to enjoy 29 per cent waiver on overdue taxes if they take advantage of VAIDS. The VAIDS programme is aimed at reducing tax payers’ liability and creates more awareness on the statutory function of every working citizen to pay tax.