Lekan Sote, the din of the Voluntary Assets and Income Declaration Scheme has almost petered out, replaced by the hysteria resulting from the killings of innocent farmers by cattle herdsmen that politically correct government agents insist are not Fulani. You also wonder what happened to the N1.6bn said to have been voted for the campaign.
If you remember the bookkeeper in the Bible story of Luke 16:1-8 who wrote down the debt owed to his boss by debtors, you will understand government’s plan to forgive tax defaulters who voluntarily pay their tax liabilities, counting six years backwards from July 1, 2017.They’ve been given till March 31, 2018 to comply, or face the music.
It’s no news that many rich Nigerians do not pay tax, and that most poor Nigerians cannot afford to pay. And the three-year tax clearance certificate introduced by the first Olusegun Obasanjo government isn’t achieving much.
Government must have discovered that the delisting of corporate tax defaulters from the register of the Corporate Affairs Commission isn’t working either. Defaulters forgive their own sins by simply registering new companies.
VAIDS, which seeks to widen the tax net, is an initiative of the Federal Ministry of Finance, and the joint tax boards. It embraces Company Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duty, Tertiary Education Tax, Tenement Rates, and Property Tax.
Incidentally, other forms of taxes, including customs duty, paid on import and export of goods; excise duty, paid on domestic manufacture; and inheritance tax, payable as the estate of a deceased is being transferred to intended legal beneficiaries, are not covered by VAIDS.
VAIDS allows tax defaulters to voluntarily declare their income and assets, pay the appropriate tax, and thereby boost tax revenue of all tiers of government. It is the tax defaulter’s plea bargain escape route from prosecution. It comes with the novel “Tax Thursday,” which dedicates every Thursday to propagating tax information, and reminding taxpayers to comply.
Also, VAIDS comes with the N-Power scheme that employs 7,500 qualified volunteers who will be trained to, among other things, do tax promotions, documentation reviews, keeping of records, responding to tax enquiries, managing customers, and report writing.
By the way, VAIDS should not be confused with the rogue, fraudulent, and immoral Economic Amnesty Bill that the House of Representatives was concocting to allow treasury looters keep 30 per cent of their loot in exchange for forgiveness.
This “yeye,” or nonsense ploy is one of the ways that corruption is “falling the hand” of President Muhammadu Buhari’s anti-corruption war. The other way is the failure of the Senate to confirm Ibrahim Magu, whom some say has some baggage, as the Chairman of the Economic and Financial Crimes Commission.
Those old enough may remember how, in the 1950s and 1960s, local government policemen, in their well-starched khaki shorts, pursued personal income tax defaulters, and threw those unfortunate enough to be caught into a barbed wire “prison cell.”
Anyone who lived in Ijebu Ode of those days should remember how “gende,” or able-bodied young men, faced ridicule and shame in the transparent cell erected on the premises of “Court Oba Marun,” a customary court said to have been presided over by five leading kings in Ijebuland of the colonial era.
A tax is a rate or sum of money assessed on a citizen’s person or property for the support of the work of government. You do not ask for a police force, or army, but you get them nonetheless. Tax is commonly levied upon assets, real property, or income derived from wages earned or upon the sale or purchase of goods.
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Tax has also been used for other purposes, like fiscal or macroeconomic policies to regulate the economy of a nation. It could also be used to snare slippery criminals, as was the case of American mafia don, Al Capone.
In 1931, American tax authorities employed the novel idea of using tax evasion to arrest, prosecute, and jail Al Capone, who escaped the law, though he masterminded several killings, illicit alcohol bootlegging, and brothel operations. His negotiations with federal authorities to pay back taxes failed, and he got an 11-year jail term, eight of which he served.
In 1927, a probably prescient Associate Justice of America’s Supreme Court, Oliver Wendell Holmes, Jr., had rejected the argument that pleading the Fifth Amendment to the American Constitution, which allows that a man shall not bear witness against himself, can protect criminals from reporting illegal income.
Accounting students in American universities will recall the deadpan look on the faces of their taxation lecturers who taught the class, with gusto and clinical precision, how to value seized cocaine, and determine tax payable by the criminal therefrom.
In cases such as this, the principle of double jeopardy by which the American Constitution provides that “No person… shall be… subject for the same offence to be twice put in jeopardy…” does not apply: A drug dealer goes to jail for dealing in drugs in the first instance, and then pays tax on his haul, or earns more jail years if he defaults.
This American practice encourages one to suggest that the Nigerian government should consider exacting tax on proceeds of official corruption, kidnapping, fraud, and trade in narcotics, in addition to making the offender do time at the pleasure of the Comptroller-General of the Nigerian Prisons Service.
Somebody has observed that whereas South Africa, with annual Gross Domestic Product of $380 billion, realises about $75 billion, or about 20 per cent, tax, Nigeria, Africa’s biggest economy, with a whittled down GDP of $416 billion, realises a paltry $4 billion, or less than one per cent of GDP.
The Federal Inland Revenue Service revealed that out of a population of 70 million taxable adults in Nigeria, only 14 million pay tax. Government must pay closer attention to corporate organisations that deduct Pay As You Earn Income Tax from the wages of their employees, but fail to remit the same to the appropriate tax authorities.
No one should have a place to hide as no one is exempted from payment of tax in Nigeria anymore: The Personal Income Tax (Amendment) Act signed by former President Goodluck Jonathan requires even the President and governors, hitherto exempted, to pay taxes from their remuneration while in office.
You have got to give it to Tunde Fowler, Chairman of the Federal Inland Revenue Service, who has come up with this novel, taxpayer-friendly VAIDS idea of tax collection. But it shouldn’t have come as a surprise considering his stellar performance in being able to increase the Internally Generated Revenue of Lagos State.
Two things: First, the tax rate, especially of Personal Income Tax and Value Added Tax need not be increased. In the face of a slumbering economy, increasing the number of taxpayers should just be enough.
Second, the Federal Government must not only adopt the Lagos State template to raise tax revenue, it must also imbibe the Lagos State spirit of adopting macroeconomic policies that enable Corporate Nigeria and individual taxpayers to prosper and therefore pay their taxes willingly.
Before becoming Vice President, Prof Yemi Osinbajo once said that the way that citizens could hold their government accountable was to diligently pay their taxes.
By Lekan Sote
If you remember the bookkeeper in the Bible story of Luke 16:1-8 who wrote down the debt owed to his boss by debtors, you will understand government’s plan to forgive tax defaulters who voluntarily pay their tax liabilities, counting six years backwards from July 1, 2017.They’ve been given till March 31, 2018 to comply, or face the music.
It’s no news that many rich Nigerians do not pay tax, and that most poor Nigerians cannot afford to pay. And the three-year tax clearance certificate introduced by the first Olusegun Obasanjo government isn’t achieving much.
Government must have discovered that the delisting of corporate tax defaulters from the register of the Corporate Affairs Commission isn’t working either. Defaulters forgive their own sins by simply registering new companies.
VAIDS, which seeks to widen the tax net, is an initiative of the Federal Ministry of Finance, and the joint tax boards. It embraces Company Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duty, Tertiary Education Tax, Tenement Rates, and Property Tax.
Incidentally, other forms of taxes, including customs duty, paid on import and export of goods; excise duty, paid on domestic manufacture; and inheritance tax, payable as the estate of a deceased is being transferred to intended legal beneficiaries, are not covered by VAIDS.
VAIDS allows tax defaulters to voluntarily declare their income and assets, pay the appropriate tax, and thereby boost tax revenue of all tiers of government. It is the tax defaulter’s plea bargain escape route from prosecution. It comes with the novel “Tax Thursday,” which dedicates every Thursday to propagating tax information, and reminding taxpayers to comply.
Also, VAIDS comes with the N-Power scheme that employs 7,500 qualified volunteers who will be trained to, among other things, do tax promotions, documentation reviews, keeping of records, responding to tax enquiries, managing customers, and report writing.
By the way, VAIDS should not be confused with the rogue, fraudulent, and immoral Economic Amnesty Bill that the House of Representatives was concocting to allow treasury looters keep 30 per cent of their loot in exchange for forgiveness.
This “yeye,” or nonsense ploy is one of the ways that corruption is “falling the hand” of President Muhammadu Buhari’s anti-corruption war. The other way is the failure of the Senate to confirm Ibrahim Magu, whom some say has some baggage, as the Chairman of the Economic and Financial Crimes Commission.
Those old enough may remember how, in the 1950s and 1960s, local government policemen, in their well-starched khaki shorts, pursued personal income tax defaulters, and threw those unfortunate enough to be caught into a barbed wire “prison cell.”
Anyone who lived in Ijebu Ode of those days should remember how “gende,” or able-bodied young men, faced ridicule and shame in the transparent cell erected on the premises of “Court Oba Marun,” a customary court said to have been presided over by five leading kings in Ijebuland of the colonial era.
A tax is a rate or sum of money assessed on a citizen’s person or property for the support of the work of government. You do not ask for a police force, or army, but you get them nonetheless. Tax is commonly levied upon assets, real property, or income derived from wages earned or upon the sale or purchase of goods.
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Tax has also been used for other purposes, like fiscal or macroeconomic policies to regulate the economy of a nation. It could also be used to snare slippery criminals, as was the case of American mafia don, Al Capone.
In 1931, American tax authorities employed the novel idea of using tax evasion to arrest, prosecute, and jail Al Capone, who escaped the law, though he masterminded several killings, illicit alcohol bootlegging, and brothel operations. His negotiations with federal authorities to pay back taxes failed, and he got an 11-year jail term, eight of which he served.
In 1927, a probably prescient Associate Justice of America’s Supreme Court, Oliver Wendell Holmes, Jr., had rejected the argument that pleading the Fifth Amendment to the American Constitution, which allows that a man shall not bear witness against himself, can protect criminals from reporting illegal income.
Accounting students in American universities will recall the deadpan look on the faces of their taxation lecturers who taught the class, with gusto and clinical precision, how to value seized cocaine, and determine tax payable by the criminal therefrom.
In cases such as this, the principle of double jeopardy by which the American Constitution provides that “No person… shall be… subject for the same offence to be twice put in jeopardy…” does not apply: A drug dealer goes to jail for dealing in drugs in the first instance, and then pays tax on his haul, or earns more jail years if he defaults.
This American practice encourages one to suggest that the Nigerian government should consider exacting tax on proceeds of official corruption, kidnapping, fraud, and trade in narcotics, in addition to making the offender do time at the pleasure of the Comptroller-General of the Nigerian Prisons Service.
Somebody has observed that whereas South Africa, with annual Gross Domestic Product of $380 billion, realises about $75 billion, or about 20 per cent, tax, Nigeria, Africa’s biggest economy, with a whittled down GDP of $416 billion, realises a paltry $4 billion, or less than one per cent of GDP.
The Federal Inland Revenue Service revealed that out of a population of 70 million taxable adults in Nigeria, only 14 million pay tax. Government must pay closer attention to corporate organisations that deduct Pay As You Earn Income Tax from the wages of their employees, but fail to remit the same to the appropriate tax authorities.
No one should have a place to hide as no one is exempted from payment of tax in Nigeria anymore: The Personal Income Tax (Amendment) Act signed by former President Goodluck Jonathan requires even the President and governors, hitherto exempted, to pay taxes from their remuneration while in office.
You have got to give it to Tunde Fowler, Chairman of the Federal Inland Revenue Service, who has come up with this novel, taxpayer-friendly VAIDS idea of tax collection. But it shouldn’t have come as a surprise considering his stellar performance in being able to increase the Internally Generated Revenue of Lagos State.
Two things: First, the tax rate, especially of Personal Income Tax and Value Added Tax need not be increased. In the face of a slumbering economy, increasing the number of taxpayers should just be enough.
Second, the Federal Government must not only adopt the Lagos State template to raise tax revenue, it must also imbibe the Lagos State spirit of adopting macroeconomic policies that enable Corporate Nigeria and individual taxpayers to prosper and therefore pay their taxes willingly.
Before becoming Vice President, Prof Yemi Osinbajo once said that the way that citizens could hold their government accountable was to diligently pay their taxes.
By Lekan Sote
Twitter @lekansote1
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