Voluntary Assets & Income Declaration Scheme (VAIDS) is one of the latest scheme of the Federal Government aimed at boosting its non-oil revenue!  In order to boost compliance, it is expedient that we have an understanding of the Scheme.

On 1st July 2017, the Federal Government of Nigeria put into effect an Executive Order that brought into effect VAIDS to enhance voluntary tax compliance and increase the internally generate revenue at both State and Federal levels of government. 

VAIDS is a tax amnesty incentive given by the Federal Government of Nigeria to tax defaulters would seek to come clean, declare their assets and income and pay the relevant taxes thereon. It is an opportunity which has a time limit (Nine (9) months from the date the Order was issued (1st July 2017) for taxpayers who are in default of their tax obligations to voluntarily declare their true incomes and assets, so proper assessment of their tax liabilities could the determined.

VAIDS period is 1st July 2017 to 31st March 2018. The Relevant Years of Assessment are 2011 to 2016.

As explained by officers of Federal Inland Revenue Service (FIRS) in Port Harcourt, the advantage of the scheme for the taxpayer is that they would not be charged any interest and penalties on past due obligations, nor would they be prosecuted. By virtue of the existing tax laws, any company or individual that fails to render tax returns is subject to a fee of N500,000.00 and N50,000.00 for individuals. Furthermore the taxpayer could be allowed the option of paying up the tax liability established, in instalments over a period of three years. 

This Scheme is expected to improve the level of tax compliance, increase the revenue accruable to government and thereby reduce significantly the level of tax evasion.

VAIDS is administered by the FIRS for companies and taxes payable to the Federal Government, while the State Boards of Internal Revenue (SBIR) are responsible for those payable to the State Government.

Nigeria’s tax to GDP ratio, at just 6%, is one of the lowest in the world (compared to India’s of 16%, Ghana’s of 15.9%, and South Africa’s of 27%). Most developed nations have tax to GDP ratios of between 32% and 35%.

Source: www.vaids.gov.ng

As the citizens brace up to be more tax compliant, their expectation is that government would increase its level of accountability and responsibility towards the citizenry by providing the basic facilities such as security, transportation, power, education, health and shelter.

Visit www.vaids.gov.ng for more details