The Minister of Finance, Mrs. Kemi Adeosun has given reasons why the Federal Government decided to launch the Voluntary Assets and Income Declaration Scheme (VAIDS) at this time.
Speaking in Abuja at the weekend, the minister said there was currently a global initiative to tackle illicit financial flows and tax evasion, which have contributed to Nigeria’s underdevelopment.
According to her, a report by former South African Premier, Thabo Mbeki, found that the amount of illicit financial flows out of Africa exceeded the amount of development aid that Africa receives. Nigeria has the highest level of illicit financial flows in Africa.
“As part of the global support to rebuild Nigeria under President Muhammadu Buhari, government has secured the co-operation of a number of nation states in its quest to repatriate funds due to it. Nigeria has also signed agreements with a number of nations, which provide for the automatic exchange of information. These agreements allow the exchange of information between tax authorities of different countries and about financial accounts and investments to help stop tax evasion. Countries who are party to this agreement include Switzerland, Panama, the Bahamas and other tax havens. Additionally, banking information will easily be shared across countries due to newly implemented Common Reporting Standards (CRS),” she said.
Adeosun lamented that the number of Nigerians in the tax net was abysmally low, adding that the government targets at least $1 billion from the initiative.
The minister stated that the Federal Executive Council, in 2016, approved Nigeria’s participation in the country-by-country reporting standard.
She said, “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. In addition, Nigeria signed up for the establishment of the Beneficial Ownership Register at the Anti-Corruption Summit in London in 2016. The will give us access to the true owners of properties in the UK and other participating countries.
“Within Nigeria, recent reforms provide additional information to the tax authorities. There is now increased inter-agency co-operation providing information from bank verification number, the Nigerian Financial Intelligence Unit, state land registries and the Corporate Affairs Commission, among others, to create an accurate financial profile of Nigeria’s taxpayers.”
