Voluntary Asset and Income Declaration Scheme (VAIDS) is a time-limited opportunity for taxpayers to regularize their tax status relating to previous tax periods and pay any taxes due. Under the Scheme, tax defaulters are required to voluntarily disclose any previously undisclosed asset and income relating to the preceding six (6) years of assessment within a nine (9) month period from July 1, 2017. It has been described as giving tax amnesty to defaulters albeit for a limited period.
The objectives of the Scheme include to encourage full tax compliance, discharge of outstanding tax liabilities as well prevent tax evasion. While it increases government revenue, the Tax Payer also benefits from it vide workable tax payment plans, and immunity from prosecution for tax offences and tax audit.
Part of the obligations of the Scheme on taxpayers include:
- Regularization of tax liabilities for all the relevant years.
- Pay all outstanding taxes.
- Prevent and stop tax evasion
- Ensure full tax compliance.
Upon compliance the Scheme will provide the following benefits for taxpayers:
- Immunity from prosecution for tax offences;
- Immunity from tax audit;
- Waiver of interest;
- Waiver of penalties; and
- Option of spreading payment of outstanding liabilities over a maximum period of three years as may be agreed with the relevant tax authority.
The Scheme, however, has consequences in the event of failure to comply after the expiration of the nine months moratorium. These include
- Liability to pay the principal sum due in full;
- Liability to pay all interests and penalties arising from the principal sum;
- Liability to be prosecuted in accordance with relevant laws for tax offences;
- Withdrawal of any relief, which may have been granted to the participant;
- Liability to undergo comprehensive tax audit; and
- Any sum paid in relation to the Scheme may be counted as part-payment of any further outstanding tax in respect of undisclosed information.
Similarly, the Acting President has also declared every Thursday, from 1st July, 2017 to 31st March, 2018 (throughout the period of VAIDS), as TAX THURSDAY.
TAX THURSDAY is a day set aside for all tax authorities at all levels throughout the Federation to, among other things:
Increase tax awareness among the public;
- Inculcate taxation and tax payment culture among the citizens of Nigeria;
- Sensitize taxpayers and the general public on tax obligations as civic responsibility;
- Registering taxable individuals and entities who are not yet in the database of taxpayers;
- Passing information on tax matters, such as relevant dates of filing returns of various tax types, taxpayer obligations and rights, consequences of violating tax laws;
- Organizing seminars, lectures, symposia;
- Public enlightenment at markets, shopping malls, motor parks, commercial centres, etc.;
- Organizing Street March/Road Shows; and
- Organizing interactive sessions with various categories of taxpayers and relevant stakeholders.
These activities are expected to be organized and conducted by FIRS, SIRS, and the Local Government Revenue Committees simultaneously across the FCT and the States.
A release signed by the Secretary of the Joint Tax Board, Mohammed Lawal Abubakar, said the aim and focus of the exercise should not just be VAIDS but on general tax matters. He advised tax authorities to get their Executive Governors and key principal officials involved so as to achieve the purpose of Tax Thursday.