The Federal Government has commenced a review of the tax profiles of companies that received major payments from the Federal Government at least in the last five years.
Minister of Finance, Kemi Adeosun who disclosed this on Sunday also confirmed that a total of 1,710 Community Tax Liaison Officers (CTLOs) have been deployed to 33 States, out of 2,190 tax officers recruited and trained to raise awareness on tax under the Voluntary Assets and Income Declaration Scheme (VAIDS).
A statement from the finance ministry said Adeosun made this disclosure at the weekend in Lagos at a workshop organised by the Federal Ministry of Finance, Federal Inland Revenue Service and Joint Tax Board for lawyers, accountants and other professionals advising clients on participation in the VAIDS.
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The CTLOs are already deployed to Adamawa, Cross River, Delta, Edo, Enugu, Kaduna, Kwara, Lagos, Nassarawa, Niger, Ogun and Oyo, among others.
VAIDS, an initiative of the Federal Ministry of Finance in collaboration with the State Tax Authorities, is a revolutionary programme that provides tax defaulters with a nine-month opportunity to voluntarily and truthfully declare previously untaxed assets and incomes.
The tax amnesty period is expected to lapse on March 31, 2018.
Adeosun asserted 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.
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She reiterated the willingness of the Federal Government to prosecute tax evaders after the tax amnesty period had elapsed.
The Minister said, “The unique cooperation between the various arms of Federal Government, State Governments and Foreign Governments have 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 utilized. For instance, we have reviewed all companies that received major payments from the Federal Government in the last 5 years and found that even those who made money from the government, under-declared.”
The Minister further noted 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”.
Her words, “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 taxpayers. 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.
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She, 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 to determine their tax compliance status at home.
The 500 prominent Nigerians, according to her, will receive their letters beginning from Monday, November 27, 2017, asking them to take advantage of the tax amnesty to regularise their tax status and avoid prosecution and fines.
She 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 but rather a notice that the data suggests possible underpayment and prompt check compliance.
“It is premature to call such person 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 regularize. 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.”
The Minister indicated that non-receipt of a letter should not be taken as an indication that the 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.
Onyinye Nwachukwu, Abuja
