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FG Targets $1bn In New Tax Policy

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The Federal Government yesterday announced a new tax scheme that is expected to generate an estimated  US$1 billion in the next three years. The new policy is expected to kick off on May 1 and is expected to run for six months and tax payers will be allowed up to 3 years to settle their liabilities.

This was disclosed by the Chairman of the Federal Inland Revenue Service ( FIRS), Babatunde Fowler,after the National Executive Council meeting which was attended by the 36 states governors and presided over by vice president, Yemi Osinbajo at the Presidential Villa.

He was joined at the briefing by the Governor of Abia State, Okezie Ikpeazu and Deputy Governor of Kaduna State, Bala Bantex.

Fowler lamented that the under payment of tax via the use of Tax Havens and other evasion strategies has not been helpful to Nigeria.

According to him ,this practice has been principally perpetrated by multi-national companies and high net worth individuals noting that  Nigeria has the lowest non-oil tax to GDP at 6%.

Fowler said”The proposed Nigeria Voluntary Asset and Income Declaration Scheme (VAIDS) will capitalise on the considerable international goodwill built by President Buhari in his mission to rebuild Nigeria.

“Capitalise also on the current global movement against tax evasion and illicit financial flows. It will offer a window for those who have not complied with extant tax regulations to remedy their position by the provision of limited amnesty to enable voluntary declaration and payment of liabilities.

“ VAIDS scheme targets to increase the tax to GDP ratios to 15% from just 6% by 2020. The scheme will simultaneously generate revenue and encourage investment and economic activity – as only 214 individuals in the entire country pay N20 million or more in tax annually

He observed that the VAIDS scheme will embrace all federal and states’ taxes such as Companies Income Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duties, Tertiary Education Tax, Technology Tax.

Fowler contended that the scheme is intended to cover all back taxes without any limit to time on how far back a tax assessment can go where a taxpayer has wilfully defaulted.

He explained “The scheme is targeted to run from May 1, 2017 for up to 6 months and incentives will be put in place to encourage early participation.

“Tax payers will be allowed up to 3 years to settle their liabilities.Revenue expected from the scheme conservatively estimated at US$1 billion.”

According to him, based on initial estimates, it is anticipated that at least 50% of the funds recovered will belong to States who are the ultimate collectors of personal income taxes. MoU to be gazetted and will be signed with each State Government.

He said the  Minister of Finance reported to council that the balance in the Excess Crude Account (ECA) as at 15th March, 2017 stood at US$2,45,864,724.59, recording a marginal increase of US$2,458,382,882.03.

“Finance Minister added that the ECA balance does not reflect the decision of Council last month to deduct S250 million for injection into the Sovereign Wealth Fund “

“The Stabilization Fund Account (SFA) is an account equivalent to 0.5% of the Federation Account allocated and paid into a fund to be designated (Stabilization Account) from where if any State of the Federation suffers absolute decline in its revenue arising from factors outside its control, shall tap in, to augment the allocation to that state.
Based on the above, he added that the Minister of Finance informed Council that the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) recently approved for disbursement (N39,613,282,870.69) to a number of states.

“The Honourable Minister further informed Council that the balance in the SF now stands atN25,793,400,290.00” he said.

On his part, the Deputy Governor of Kaduna said the NSA briefed the council on the security situation in the country with particular reference to: Boko Haram insurgency in the North-East,cattle rustling, ethnic militias/security outfits, kidnapping, armed robbery, militancy in Niger Delta and  proliferation of small arms across the country.

He said  the NSA fingered unemployment as the major threat to security and in their responses, council members highlighted the potential role and significance of the federal government’s social investment programmes in averting some of the threats and encouraged an active implementation going forward.

He said “Council agreed to hold an extra-ordinary session to discuss security matters especially as it has to do with the economy.

He also said governors welcomed President Buhari and  thanked him for his support to the states.
During the briefing Abia governor stressed the need to accelerate and review the extant National Forest Policy as well as ensure its backing through the enactment of relevant Forest Laws.

“Massive Afforestation/Reforestation of degraded forest and landscape outside Forests. Establishment of take-off of the national Forestry Trust Fund through contributions by Wood Products Exporters according to products classification (tally processed, semi processed, charcoal) , he stated.

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