- Targets $1bn from new tax scheme
The Federal Government hinted plans to organise an all-encompassing national security summit to discuss myriads of security threats across the country, especially the Boko Haram terrorism, herdsmen attacks, and Niger Delta militancy among others.
This is coming as the Government is also targeting estimated revenue of $1 billion from the proposed Nigeria Voluntary Asset and Income Declaration Scheme.
The planned security seminar was disclosed on Thursday during the National Executive Council (NEC) meeting presided over by Vice-President Yemi Osinbajo at the Presidential Villa, Abuja.
The outcome of the NEC meeting was conveyed to State House correspondents by the trio of Abia State governor, Dr. Okezie Ikpeazu, Kaduna State Deputy Governor, Mr. Bala Bantex, and Chairman of the Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler.
Speaking the issue, Bantex said the Council members plan an extraordinary session to discuss security matters especially as it relates to the economy.
He said that the “decision to hold the session came following a briefing from the National Security Adviser (NSA), Babagana Mungonu on the Security situation in the country with particular reference to Boko Haram insurgency in the North-East, cattle rustling, ethnic militias/security outfits, Kidnapping, Armed robbery, Militancy in Niger Delta and proliferation of small arms across the country.”
According to him, “the NSA fingered unemployment as the major threat to security”.
Earlier, Fowler spoke on plans for estimated revenue of $1 billion from the proposed Nigeria Voluntary Asset and Income Declaration Scheme.
He said the scheme takes off on May 1st for up to six months and will offer a window for those who before now have not complied with extant tax regulations to remedy their positions by the provision of limited amnesty to enable voluntary declaration and payment of liabilities.
He said that NEC approved the scheme following a briefing by the Minister of Finance, Mrs. Kemi Adeosun at the meeting where she stated that the underpayment of tax via the use of Tax Havens and other evasion strategies which have not been helpful to Nigeria.
The scheme, he said, will also have incentives in place to encourage early participation. Under the scheme, taxpayers will be allowed up to 3 years to settle their liabilities.
According to Fowler, FIRS is targeting an increase in tax contribution to the Gross Domestic Product (GDP) to 18 percent by 2020.
He said this will be done through a Voluntary Asset and Income Declaration Scheme (VAIDS) approved by NEC on Thursday.
The VAIDS scheme is expected to simultaneously generate revenue and encourage investment and economic activity as only 214 individuals in the entire country pay N20 million or more in tax annually.
“VAIDS scheme targets to increase the tax to GDP ratios to 18 per cent from just six per cent by 2020”, adding that the FIRS can actually surpass NEC’s projected 15 per cent,” he added.
The FIRS boss said only 14 million Nigerians out of 40 million eligible taxpayers
currently pay tax.
Fowler said a conservative revenue of US$1 billion is expected to be generated from
the scheme, adding that the VAIDS scheme will embrace all Federal and States’ taxes such as Companies Income Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duties, Tertiary Education Tax, Technology Tax.
It is expected to cover all back taxes without any limit to time on how far back a tax assessment can go where a taxpayer has willfully defaulted.
“It is anticipated that at least 50 per cent of the funds recovered will belong to States who are the ultimate collectors of personal income taxes. A MoU will be gazetted and signed with each State Government”, Fowler who briefed alongside the Abia state governor Okezie Ikpeazu and Kaduna state deputy governor Bala Bantex, said.
According to Fowler, under-payment of tax has been principally perpetrated by multinational companies and high net worth individuals, keeping Nigeria as a country with the lowest non-oil tax to GDP at six per cent.
“The proposed Nigeria Voluntary Asset and Income Declaration Scheme (VAIDS) will capitalize on the considerable international goodwill built by President Buhari in his mission to rebuild Nigeria,” he said.
The scheme is also expected to capitalize on the current global movement against tax evasion and illicit financial flows and offer a
window for those who have not complied with extant tax regulations to remedy their position by the provision of limited amnesty to enable voluntary declaration and payment of liabilities.
Adeosun also reported to Council that the balance in the Excess Crude Account (ECA) as at 15th March 2017 stood at US$2, 45,864,724.59, recording a marginal increase of US$2,458,382,882.03.
The ECA balance does not reflect the decision of Council last month to deduct $250 million for injection into the Sovereign Wealth Fund.
She also briefed the council on the Stabilization Fund Account (SFA), an account which is equivalent to 0.5% of the Federation Account.
The Finance Minister informed Council that the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) recently approved for disbursement (N39, 613,282,870.69) to a number of States. She said the stabilization fund now stands at N25, 793,400,290.00.
Council also deliberated on the need to accelerate and review the extant National Forest Policy as well as ensure its backing through the enactment of relevant Forest Laws.
Ikpeazu said council recommended massive afforestation/reforestation of degraded forests and landscape outside Forests and the establishment of take-off of the National Forestry Trust Fund through
contributions by Wood Products Exporters according to products classification (tally processed, semi-processed, charcoal) etc.
It also recommended the establishment of National Forest Model Estate in all the States and FCT, Improvement in forest governance and establishment of National Taskforce to effectively protect the forest Estate/Reserve as well as effective monitoring, evaluation, documentation of trade in wood and wood product