FG Reviews Tax Profiles of Companies with Major Payments from 2012
Identifies 500 Nigerians with offshore property and trusts Deploys 1,700 tax officers in 33 states
In a bid to give further impetus to its tax drive under the Voluntary Assets and Income Declaration Scheme (VAIDS), the federal government has begun a review of the tax profiles of companies which received major payments in the past five years.
It has also compiled a list of 500 prominent Nigerians with property and trusts abroad in order to determine their tax compliance status at home.
The 500 prominent Nigerians will receive their letters beginning from today (November 27, 2017).
The Minister of Finance, Mrs. Kemi Adeosun made the disclosures at a workshop organised by the Federal Ministry of Finance, Federal Inland Revenue Service (FIRS) and Joint Tax Board (JTB), for lawyers, accountants and other professionals advising clients on participation in the VAIDS.
Adeosun warned that there was no hiding place for tax evaders residing in Nigeria or abroad, noting that the federal government had put in place a data mining mechanism to fish out evaders.
A statement issued by her spokesman, Mr. Oluyinka Akintunde, quoted the minister, saying: “The unique cooperation between the various arms of federal government, state governments and foreign governments has provided an unprecedented level of data that allows the Nigerian government to profile taxpayers accurately and identify those whose lifestyle and assets are not consistent with their declared income.
“A lot of data mining is going on daily, both locally and internationally, on property ownership and other items. Data is an extremely powerful tool that is now being utilised. For instance, we have reviewed all companies that received major payments from the federal government in the last five years and found that even those who made money from government under-declared,” the minister said.
She added that the government’s tax compliance team had looked at import records and compared the value of goods imported to the tax declarations of the importers, but the discovery was worrisome as “the variance was disturbingly wide.
“On personal income taxes, we reviewed property and company ownership as well as registration of high value assets and foreign exchange allocations, which gives us a sense of the lifestyles of the persons.
“But again, we found major non-compliance. In some cases, people declared as little as N10 million as income but purchased expensive property overseas and in Nigeria, registered high specification vehicles and funded luxurious personal events costing multiples of the declared income.
“We have blocked a major loophole by using data to profile tax payers. Thus, someone owning properties across multiple states and overseas can selectively declare knowing that tax authority had no means of cross checking.
“This is especially the case with overseas assets and income where state governments lacked jurisdiction. But with the centralisation of data under Project Lighthouse within the Federal Ministry of Finance, a major loophole has been plugged,” she added.
Adeosun reiterated the willingness of the federal government to prosecute tax evaders after the tax amnesty period had elapsed, foreclosing the possibility of extending the March 31, 2018 deadline of VAIDS.
The minister therefore called on professionals to advise their clients to uphold honesty in the declaration of their assets and income as well as the regularisation of their tax status.
She further told the gathering of professional advisers that the federal government had compiled a list of 500 prominent Nigerians with property and trusts abroad in order to determine their tax compliance status at home.
The 500 prominent Nigerians, according to her, will receive their letters beginning from today (November 27, 2017), asking them to take advantage of the tax amnesty to regularise their tax status and avoid prosecution and fines.
Adeosun said: “The first 500 letters are ready and will go out this week but there are many more. Receiving the letter is not an accusation of deliberate wrongdoing rather a notice that the data suggests possible underpayment and a prompt to check compliance.
“It is premature to call such persons tax evaders as there are many reasons that taxpayers may have failed to comply. We will only label people as real tax evaders when the amnesty deadline expires and they have failed to regularise.
“Such persons can then legitimately be called tax evaders, as their non-participation in VAIDs indicates that they are willful tax evaders. We will then proceed to apply the full weight of the law.”
According to her, non-receipt of a letter should not be taken as an indication that government had not identified a potential evader.
“We are sending out thousands of letters to those in the high risk categories but our advice is that every person and every company should do a self-assessment and take advantage of VAIDs to correct any under declaration, irrespective of whether they get a letter,” she added.
The minister also disclosed that the federal government has recruited and trained 2,190 Community Tax Liaison Officers (CTLOs) under the VAIDS.
She confirmed that a total of 1,710 CTLOs have been deployed to 33 states, out of 2,190 tax officers recruited and trained to raise awareness about the scheme and taxation in general.
The CTLOs are currently operating in Adamawa, Cross River, Delta, Edo, Enugu, Kaduna, Kwara, Lagos, Nassarawa, Niger, Ogun and Oyo, among others states, she said.
VAIDS, an initiative of the Ministry of Finance in collaboration with the State Tax Authorities, is a programme that provides tax defaulters a ninemonth opportunity to voluntarily and truthfully declare previously untaxed assets and incomes.
The tax amnesty period is expected to lapse on March 31, 2018.
In another development, the Ministry of Finance said its attention had been drawn to attempts by some importers and Non-Government Organisations (NGOs) to malign the name of Adeosun, and the ministry “over spurious claims of refusing to grant import duty waivers in respect of drugs, health commodities and related equipment donated by the Global Fund.
*The ministry strongly denies that the minister has refused to grant import duty waivers to some importers and NGOs for drugs and health commodities imported into the country.
“There are laid down statutory procedures governing the granting of import duty waivers to importers and NGOs, which are part of holistic measures put in place to check abuses of the federal government’s fiscal incentives, and to put a halt to rampart corrupt practices in the economic sector,” the ministry said in a statement issued by its Director (Press), Mr. Salisu N’Inna Dambatta
According to the statement, “These procedures include submission of an application by the importer and NGO to the Federal Ministry of Finance through the Federal Ministry of Health; evidence of registration with the Corporate Affairs Commission (CAC) submission of an approved Memorandum of Understanding duly signed by the Minister of State, Budget and National Planning between the donor agencies, Federal Government of Nigeria and the recipient-NGOs “