With the deadline for compliance with the Voluntary Assets and Income Declaration Scheme (“VAIDS”), fast approaching, we look at the benefits and penalties of non -compliance.
In return for truthful & voluntary disclosure, compliance with the regulations and payment of outstanding tax liabilities, the affected taxpayers shall enjoy the following benefits:
- freedom from prosecution for tax offences;
- waiver of applicable penalties and interest due (at 21% per annum);
- the option of spreading the payment over a 3-year period subject to agreement with the FIRS; and
- transfer of assets previously held by nominees into their own name.
On the flipside, penalties for non-compliance include;
- liability to pay in full, the principal sum due, all interest and penalties due (10-100% of the tax due or forfeiture of related asset);
- criminal prosecution in accordance with relevant extant laws, including up to 5 years in jail;
- withdrawal of any reliefs, which may have been granted to the participant;
- liability to undergo comprehensive tax audit; and
- relating to undisclosed information, any sum voluntarily declared may be counted as part payment of outstanding tax.
Although the government’s plan post-deadline (31-Mar-2018) plans remain unclear, we advise clients to avoid any reputational risks that may arise thereafter