VAIDS: Benefits of Compliance Vs. Penalties for NonCompliance


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:

  1. freedom from prosecution for tax offences;
  2. waiver of applicable penalties and interest due (at 21% per annum);
  3. the option of spreading the payment over a 3-year period subject to agreement with the FIRS; and
  4. transfer of assets previously held by nominees into their own name.


On the flipside, penalties for non-compliance include;

  1. 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);
  2. criminal prosecution in accordance with relevant extant laws, including up to 5 years in jail;
  3. withdrawal of any reliefs, which may have been granted to the participant;
  4. liability to undergo comprehensive tax audit; and
  5. relating to undisclosed information, any sum voluntarily declared may be counted as part payment of outstanding tax.

VAIDS: Benefits of Compliance Vs. Penalties for NonCompliance - Brand Spur

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