The party is about to end for sophisticated Nigerian tax evaders with offshore accounts, properties and trusts.
Nigeria has joined the Automatic Exchange of Tax Information (AETI) and begun receiving verifiable data from other foreign member nations, on offshore accounts and properties belonging to her citizens.
The country’s Finance Minister, Kemi Adeosun singled out the United Kingdom as a major collaborator on this exercise and added that data received so far has been “impressive”.
Nigeria ranks among the bottom 10 of 190 bench-marked economies on the Paying Taxes sub-index under the World Bank Group’s “Ease of Doing Business index” for 2017. The West African country also has a tax to GDP ratio of 6%, one of the lowest in the world. The oil-dependent country is aggressively seeking to buff up revenue through taxation as oil earnings have suffered in recent times.
Consequently, it launched the Voluntary Assets and Income Declaration Scheme (VAIDS), a tax amnesty exercise for tax defaulters to enlist in the tax net without penalties. VAIDS ends in March and AETI’s information would help verify assets declared or spot potential evaders, as the case may be.
Adeosun shared that “the Federal Government is also using the data to generate ‘nudge’ letters, which are being sent to those identified as potential tax defaulters.”
She pointed out that though citizens have the right to keep their money 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.”
Based on the proposed 2018 budget by the Nigerian President Muhammadu Buhari, non-oil revenues that largely comprises Companies Income Tax, Value Added Tax, Customs and Excise Duties and Federation Account levies, are estimated to contribute almost N4.2 trillion (85%) to the projected aggregate revenue of nearly N6.6 trillion.
With this in mind, the Nigerian government intends to expand the tax net, implement tax policies, enhance the effectiveness of revenue collection agencies and improve tax compliance, in order to meet its revenue target.