Federal Government to commence review of tax returns of its contractors
As part of efforts to improve tax compliance levels, the Federal Government has commenced reviewing the tax compliance records of all contractors who received payments from the Federal Government and its various agencies in the last 7 years. This follows the results of a sampling exercise conducted by the Ministry of Finance which found that less than 20% of contractors reviewed accurately stated the income received from the Federal Government in their tax returns, while many made no declaration at all.
The Ministry of Finance and Office of the Accountant General of the Federation are now compiling detailed records of all payments exceeding N100 million made in the last 7 years, including details of the beneficiary bank accounts and other details.
The database project dubbed 'Project Light House' is aimed at building comprehensive profiles of tax payers using a wide range of available data sources, including BVN, foreign exchange allocations, land registry records, and information obtained from foreign governments. The data will be used to cross-check information provided to the tax authorities.
According to the finance minister Kemi Adeosun, “It was a matter of concern that those who earned money directly from government, which is both traceable and verifiable, still failed to pay the correct taxes thereon.” She urged such companies to promptly take advantage of the concessions offered under the Voluntary Asset and Income Declaration Scheme, adding that once an audit or investigation had commenced, a company or individual would not be able to stop that process by participating in VAIDS.