The deadline for the Voluntary Assets and Income Declaration Scheme (VAIDS) expired last week, 31st March 2018. Launched in July-2017, VAIDS targets increased tax compliance and revenue, by deepening tax penetration and granting taxpayers a time-limited opportunity to regularize their tax status without penalty.
The importance of this scheme cannot be overemphasized as Nigeria’s tax/GDP ratio stands as one of the lowest globally amid the need to shore-up non-oil revenue in the face of rising debt burden. Although the overall success of the scheme cannot be measured yet, media sources suggest that the Federal Internal Revenue Service (FIRS) has garnered over N2.0bn in eight months on VAIDS.
While the questions regarding the costs associated with generating these revenues are yet to be known, we await the next step from Ministry of Finance (MoF) following the expiration of the March-31st deadline. Earlier, the MoF had insisted it will “name-and-shame” defaulters that did not take advantage of the scheme. Recent indication, however, suggested authorities are considering an extension of the deadline, casting shadows on their next move. Overall, we encourage the government to consolidate efforts to deepen tax revenue by balancing the need to send the right signal to defaulters and addressing the technical challenges hampering compliance.
United Capital Research