• Monday, April 22, 2024
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BusinessDay

VAIDS: Regularising your tax status

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Regularising one’s tax status under the Voluntary Asset and Income Declaration Scheme (VAIDS) can only be done by remitting all applicable taxes to the relevant tax authorities including the FIRS and SBIRS, depending on the type of tax in issue.

Payments are to be made by quoting the entities full name and a reference Tax Identification Number (TIN) through a Bank. The Bank is expected to issue a payment receipt when payment is made. For persons or entities who have never paid tax, application for a TIN would be the first step before payment can be made.

However, the Scheme recognizes that many tax defaulters who are willing to comply may be cash-strapped. Thus, VAIDS avails defaulter the opportunity to enter into arrangements to pay outstanding tax liabilities in installments. At the discretion of the relevant tax authority, defaulters may be granted up to 3years to pay up their tax liability, but with the obligation to pay the interest accrued on the outstanding balance.

Where a defaulter is unable to determine his/her tax liability, the scheme also made provision for agents of the relevant tax authorities to help calculate such tax liability. But this can only be done after a defaulter has registered for VAIDS by filing the declaration form.

…Identifying willful tax evaders

On expiration of the March 31, 2018 deadline, all taxpayers who fail to take advantage of the Voluntary Assets and Income Declaration Scheme(VAIDS) and are later found to have under-declared their income or assets will be treated as willful tax evaders and will, therefore, face the wrath of the law.

Accordingly, the Federal Inland Revenue Service (FIRS) has been reported to have engaged on retainership, the service of some of the world’s leading asset tracking and recovery firms to assist in tracking the true assets of those who have not participated but are believed to have underpaid their taxes. The FIRS also plan to “Name and Shame” defaulters to reveal the identities of tax evaders to the public. This is to be supported by criminal prosecution, and recovery of taxes due with full penalties and interest.

Furthermore, the Relevant Tax Authorities (RTAs) are in the process of profiling certain categories of non-compliant taxpayers for ongoing audits and investigations, in line with the tax compliance reforms. A small team within the Ministry of Finance has, therefore, been quietly gathering information to assess degree of tax compliance over the past 15 months. We advise clients to regularize their tax status to avoid any the reputational risks that may arise thereafter.