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Tag: Tax

  • Informal sector wants a more humane tax system

    By Toni Iyare

    Members of the Informal Sector in Lagos state have called for a more humane approach by officials in the collection of taxes and rates. It is also their view that the present taxes and rates are too exorbitant, unjust and burdensome and out of tune to their earning capacity. They also want government to reward dutiful tax payers with infrastructure. They want government to adopt a five yearly review plan of taxes and rates instead of the present yearly review.

    At a recent advocacy and technical meeting of local government officials and the informal sector operators, organised in Lagos by the Community Life Project (CLP), they also ask for better engagement and consultation before taxes and rates are reviewed. They want government to ensure that artisans who are freely operating on the streets are compelled to be part of the respective trade associations while seeking for support to make the informal sector thrive.

    Mrs Comfort Akinkuowo, chairperson, National Association of Hairdressers and Cosmetologists (NASHCO) says government does not appear to have “the interests of the informal workers at heart” as they are virtually left in the cold to fend for themselves.

    “Government talks about salaries and minimum wage for government workers as if they are the only ones in Nigeria without any support for us. No provision whatsoever for informal sector.

    It’s only when they are talking about tax that they remember us. Is it that we are not human beings? Or we are not important? I can now understand the reasons why some are jumping into the lagoon. How do you tell people who have not eaten to pay tax”, she queries.

    “I’m tired of taking information from the government to our members. You are not making sales, may be you make N500, how do you have money to pay tax? Let them treat the informal sector very well”, Akinkuowo says.

    Echoing this view, Deaconess Oyewunmi Oyewole, also a member of NASHCO says, “There’s no work, my husband also has no work, we can’t pay because we have nothing. If you take away Okada, what else are you giving them? If I look around and I don’t know what to do, how do I survive? If they reduce the rates to N2,500, it will be easier. If you drive people from the roadside, the rates must be affordable. The cost of the markets is too high”.

    “Hairdressers have no light at all to do their work. The price of fuel is too high, they’ll give you light for one day so that you can pay and leave you in darkness for weeks, how do we survive?”, she quips.

    “There’s no provision for us but they want us to pay our tax. In Nigeria, government is doing nothing for the informal sector. If government can provide a conducive environment for our business, we’ll pay more. They should reduce out tax to N2,500”, ”, says Mr Joy Omiyale, chairperson, National Automobile Technicians Association (NATA), Oshodi Isolo LGA .

    While members of the informal sector say they are not opposed to the introduction of electronic payment system scheduled to start in January, they are asking for a downward review of the rates. “Electronic payment is okay. It will eliminate corruption. What we are saying is that the tax should be reduced. No receipt has been issued up till now for the one we paid last year. My members may think that I merely fiddled with their money”, says Omiyale.

    Also supporting this view, Alhaja Olabisi Fatimo Akinfala, chairperson of the Tie and Dye Association says, “ If something is done to support our business, we’ll gladly pay our taxes”.

    But Bose Ogundare of the National Union of Tailors says, “If we keep complaining, we’ll not get anywhere. Let government reduce the taxes then we’ll heartily pay. We have to pay first before asking government to do its part”. “Taxes and rates are compulsory. If we are not comfortable with the electronic cards, we can say so, let us pay our tax. If we are asking for N2,500, let us agree and say so. Oil money is gone, if we want better life, we have to pay our taxes”, she says.

    Mr Segun Apaoka, chairperson, NATA, Isolo branch who narrated how their mechanic villages were demolished after getting commendation for dutifully paying their taxes, says his members at the mechanic village in Aswani in Isolo pay as high as N600,000 per annum but have no road leading to their workshop. “We pay N600,00 per annum but they have not graded the road leading to our workshop. We also spend about one million naira to fill the road to make it passable every year”, he fumes.

    While alluding to some of the complaints of the informal sector, Mr Bolaji Ishola, an official of the Oshodi LG says, “Tax is based on income. Members of the informal sector believe that the rates are excessive. We need to engage the informal sector so that they’ll see the need to pay tax. We need to properly educate the informal sector. We also need to break the payment to per day, per week and per month in order to make it appear less burdensome”.

    Mr Omolayo Ayoola an official of Isolo LCDA is of the opinion that members of the informal sector are too difficult to engage. “Even when people see development and infrastructure, they won’t pay. No matter how you make it easier for them, they will still not want to pay”, he says.

    The LG officials however say they are encumbered by poor remuneration, poor office environment, low morale and access to materials like vehicles to effectively perform their task as opposed to staff of Lagos State Signage and Advertisement Agency (LASAA) and Land Use who are well paid and go around in air-conditioned vehicles.

    They also complain about periodic interference by LG chairmen and their aides in the performance of their job. “How can people respect us when we come in rickety vehicles unlike staff of LASAA and Land Use who are well taken care of? When they appear in their air-conditioned vehicles, you have no choice but to accord them respect”, says Ishola.

    Dr Akanle Olayinka, who presented the report of the research on tax payment by the informal sector in Lagos state commissioned by CLP, say the informal sector is much bigger than the formal sector that does the PAYEE system and therefore there’s need for government to ensure that they are effectively captured in the tax dragnet.

    “It’s not easy to bring artisans into the tax dragnet. Many artisans operate outside the associations and it’s difficult to monitor them. May be government can find a way of ensuring that they all belong to associations”

    Alluding to the leakages in the tax system, Olayinka says, “People say most LG collectors are helping themselves. People believe that there are so much leakages in the system”.

    He wants government to compensate areas where there’s high compliance with quality infrastructure while calling for better engagement and education of the informal sector. “Members of the informal sector should be invited when taxes are to be increased. Better engagement and education using the social media should also be considered. It is also important that government should deploy technology solutions to avoid leakages and enhance accountability”, he says.

    Executive Director, CLP, Mrs Ngozi Iwere says it is important that the informal sector is not at the receiving end as Lagos is being developed into a megacity.. “We need to provide safety nets for some category of people. We also don’t want to move around in the sun without knowing what the taxes are being used for. The people that you serve are the ones that you need their partnership. We need to build their capacity to be able to engage them. We also have to be sure that we conduct ourselves with respect”, she says.

    While conceding that the pay in the civil service is low, it is her view that “when the money enters government coffers, it’s important that we can engage the government on motivation”.

    Stressing the need for evidenced based governance that will respond to the need of the people in terms of infrastructure, Iwere say, “Since we’ve been here, nobody has fixed our road, nobody has provided water. We should not be paying for kids in private schools. It’s in your interest to prevent government from contracting jobs and that the benefits for citizens that are paying taxes should come to us. We don’t want government to be PLC”.

    She however cautioned against the clamour by the informal sector on government to build their associations, noting that “We should bear in mind that we want the associations to grow”. “If they help us to grow our associations, they’ll control us on what to do like what happened to the iya olojas”, she says.

    .

    Tony Iyare, Media & Commucations Consultant​

  • FG retrieves N17bn in 6 months from tax defaulters – FIRS

    he Federal Inland Revenue Service (FIRS), said it collected N17 billion from tax evaders through the Voluntary Assets and Income Declaration Scheme (VAIDS) between June and December.

    The Chairman of the Service, Mr Babatunde Fowler disclosed this on Thursday in Abuja at a public enlightenment workshop on VAIDS organised by the Federal Ministry of Finance and FIRS.

    He said that the scheme encouraged voluntary disclosure of previously undisclosed assets and income for the purpose of payment of all outstanding tax liabilities to boost revenue collection.

    “Another N6 billion is expected to be paid before the end of December. Also, 50 million dollars have been declared by individuals with properties and investment overseas, so VAIDs is also providing foreign exchange for the country.

    “We also have many companies and individuals that have already come forward, asking questions on how they can key into the scheme.

    “All this will help improve the low tax ratio from six per cent to 15 per cent by 2020 and curb the use of tax havens for illicit fund flow and tax avoidance,” he said.

    Fowler reiterated that the VAIDs programme was applicable to Personal Income Tax, Value Added Tax, Company Income Tax, Stamp Duties, Rental income and Tertiary Education Tax.

    He urged tax evaders to come and voluntarily declare their tax before the grace period elapses because afterwards, there would be grave consequences for anyone who does not obey the tax laws of the country.

    The FIRS boss said also that there was no hiding place for those who hide their wealth overseas as the country had signed agreements with several developed countries like United Kingdom to get the names of Nigerians with properties and investment there.

    “The VAIDs programme offers a grace period from July 1, to March 31, 2018, for tax evaders to voluntarily pay back to government what they owe.

    “In exchange for full and honest declaration, the government promises to waive penalties that should have been levied and also waive the interest that should have been paid on overdue taxes.

    “Also, those who declare honestly will not be subjected to any investigation or tax audit after the grace period.

    “Through the programme, government intends to increase the country’s tax to Gross Domestic Product from 6 per cent to 30 per cent, and tax base from 14 million to 17 million in two years

  • Nigeria @57: TStv Africa debuts as FG grants operator, investors 3-year tax relief

    The Federal Government has granted a 3-year tax relief to the newly inaugurated Pay TV operator in the country, TStv Africa, as well as tax free dividends to all investors in the company.

    The Minister of Information and Culture, Alhaji Lai Mohammed, announced this on Sunday night in Abuja at a dinner to mark the official unveiling of the new company.

    TheNewsGuru.com reports TStv Africa is a wholly owned Nigerian Pay TV operator with refined offerings of novel Unclassified Pay Per View subscription and complimentary internet services.

    Mohammed, who performed the official unveiling of the new company and its products, said the tax reliefs were in line with the Pioneer Status recently granted to the Creative Industry by the federal government.

    The minister congratulated the Chief Executive Officer (CEO) of the company, Dr Bright Echefu, and his team for liberalising and breaking the monopoly of Pay TV in the country.

    “The important thing about what Echefu has done today is that he has redefined the pay per view television industry and from today that industry will never remain the same again.

    “What he has done is to democratise the media and entertainment industry and make it possible for even a peasant farmer to have access to the best entertainment and news in the world.

    “It is a great opportunity for me to be the one to unveil TStv because just like a Nigerian made history by crashing the cost of telephony in Nigeria, I am glad that another Nigerian is now coming forward to crash the cost of Pay TV,” he said.

    The minister commended the courage of the investor for coming from the Diaspora to invest in his country and for believing in the government’s seriousness about diversifying the economy.

    He said the company had also demonstrated that government alone could not do all things but needed the participation and synergy of the private sector.

    “I want to assure that this administration will continue to assist you and other investors in creating the enabling environment for businesses to grow,” he said.

    The minister said that the government was aware of the huge contributions of the creative industry to the nation’s economy and would continue to support the sector.

    However, he identified contents and the lack of objective audience measurement as major challenges that had retarded the growth of TV and advertising industries in the country.

    “With the liberalisation of the industry, content has become very key because content determines which channels are being watched and which are not.

    “Another major challenge is how to get an accurate measurement of which channel is being watched and which is not.

    “Kenya and South Africa are about one third of our population but they do much better in TV and radio advertisement than us because of their robust audience measurement,” he said.

    The minister announced that the National Broadcasting Commission and his ministry would organise a workshop on Nov. 28 to address the challenge of audience measurement.

    Earlier, Echefu said that TStv Africa, which had gone through a lot of challenges, was birth to liberalise PayTV in the country, make it affordable to every Nigerian with added values.

    He said for the first time, Nigerians could now enjoy Pay Per View because with TStv, “subscription runs as you watch and it has the facility to pause your subscription when you travel”.

    Echefu said that TStv for a start has 70 premium channels model with the cheapest pay-TV in Africa with maximum subscription fee of N3,000 only.

    He said as a fully Nigerian brand with consideration for the masses, TStv is not classified and it has a model that accommodate subscription as low as N200 as N500 for a period of time.

    The CEO said TStv came with PVR (Personal Video Recorder) Decoder which allowed viewers greater control over their viewing experience with functions like pause, rewind, forward, save and record of programmes of interest.

    Echefu said that once you subscribe to TStv, you will also get complimentary internet service, enabled Wi-Fi, as well as video calls and video conferencing services.

    “It has an array of amazing TV channels with premium entertainment, educative programmes that cut across all genres.

    “The genres included news, music, general entertainment, documentary, movies, religious, sports, health, kids, fashion and lifestyle that better define the uniqueness of Nigeria’s diverse culture and traditional values,” he said.

    The CEO said TStv which was modelled for Nigerians had come to stay, assuring that it would not fail and they would deliver on their promises.

    Guests at the ceremony were entertained with live performances by musicians and comedians.

    Among the dignitaries at the event were Gov. Akinwumi Ambode of Lagos represented by the Permanent Secretary, Lagos State Ministry of Information and Strategy, Mr Fola Adeyemi, and the Permanent Secretary, Federal Ministry of Information and Culture, MS Grace Gekpe.

    Others were the Director-General of National Orientation Agency, Dr Garba Abari; former Minister of Aviation, Femi Fani-Kayode; Nollywood actors including Emeka Ike, Adigwe Okafor, Zack Amata, Dr Opa Williams and Afeez Oyetoro aka Saka.

     

  • Accountability in governance as panacea for raising tax conscious populace

    The Minister of Finance, Kemi Adeosun is known for her regular complaints of low tax compliance (especially amongst the elites) in Nigeria. Hence the incumbent administration’s resolve to go after tax evaders.

    The Nigerian tax system has undergone several reforms geared at enhancing tax collection and administration with minimal enforcement cost. The recent reforms include the introduction of Voluntary Assets and Income Declaration Scheme (VAIDS), TIN, (unique Taxpayer’s Identification Number which became effective since February 2008), automated tax system that facilities tracking of tax positions and issues by individual taxpayers, e-payment system which enhances smooth payment procedure and reduces the incidence of tax touts, enforcement scheme (Special Purpose Tax officers), these are special tax officers in collaboration with other security agencies to ensure strict compliance in payment of taxes.

    A seasoned tax consultant, Adekunle David told TheNewsGuru.com that it is understandable that government, here and in many other jurisdictions, need to resort to extraordinary measures to compel people to pay tax at all, or to pay the appropriate amount. But let it be known that the fact that government has to resort to exceptional measures on tax speaks volume of the people’s attitude to what should be a given citizen’s obligation.

    According to him, hardly does anyone, especially in this part of the world, wants to hand over hard-earned income to authorities that, in many cases are peopled by crooked politicians and wasteful public servants.

    “Nevertheless, it is most desirable to pay tax; it is a constitutional obligation, a civic responsibility and a moral duty. ‘Tax morality’ implies that, to the extent that a citizen enjoys, and expects more of, the social services provided by constituted authorities, he or she should pay something toward such services. Indeed, it is such payment that accords the right to complain if not satisfied,” he explained.

    The tax authority now has autonomy to assess, collect and record tax. This enabling environment which came into being on the basis of (Section 8(q) of FIRS Establishment Act 2007) has led to an improvement in tax administration in the country. The Nigerian tax system has undergone significant changes in recent times.

    In a functional representative democracy, paying tax is a crucial element that empowers the citizens to demand accountability from their representatives in government. The 1999 Constitution of Nigeria (as amended) stipulates in Section 24 (f) that it shall be the duty of every citizen to ‘declare his income honestly to appropriate and lawful agencies, and pay his tax promptly.’

    But in return, government is obligated to fulfill the fundamental objectives and directive principles of state policy spelt out in Chapter II of the document.

    Most noteworthy in this respect is Section 16 (2) (b) that ‘the state shall direct its policy towards ensuring that the material resources of the nation are harnessed and distributed as best as possible to serve the common good.’ So, taxation must come with not only representation but with service.

    It won’t be out of place to say that government needs the citizen’s tax to fund its activities and development projects that, by all reasonable expectation, serve the common good. Everyone has a civic duty therefore to pay his tax. It is unpardonable that the very rich who make more out of the system, either by honest or by crooked means, are the tax defaulters and tax dodgers who employ various means, some legal, some not, to achieve their unpatriotic objective.

    Besides, the very rich are well connected to often, in acts of corruption, negotiate down their tax liabilities. There is every reason to go after such persons as well as corporate bodies.

    Corporate tax fraud in the forms of avoidance, underpayment, the underpricing and transferred pricing of products and services, and many other dishonest methods, denies governments of huge revenue. These must be aggressively pursued and stopped. It is clear from Federal Inland Revenue Service (FIRS) records that so much money is lost through these leakages.

    The tax laws are consistently being reviewed with the aim of repealing obsolete provisions and simplifying the main ones. Under current Nigerian law, taxation is enforced by the 3 tiers of government, i.e. federal, state, and local governments, with each having its sphere clearly spelt out in the Taxes and Levies (approved list for Collection) Decree, 1998.

    However, despite this improvement, there are still a number of contentious issues that require urgent attention. Chief amongst these is the issue of multiple taxes administered by all the three tiers of government which sometimes imposes welfare cost.

    Furthermore, the issue of the poor data base, which contributes to tax avoidance in the country. The issue of corruption is still a perennial issue in the country; this reduces the confidence and trust of the taxpayers in discharging their civic duty. Infrastructural development is also a crucial issue. In Nigeria, the level of infrastructural facilities is in a deplorable state, most of the facilities are often privately sourced, thus a number of people wonder what the taxes collected are used for, hence the tendency to evade tax payment. Furthermore, the problem of the tax language that is legally codified makes it difficult for an average Nigerian to understand.

    Recommendations for a tax conscious populace

    To raise a more tax conscious populace, government at all tiers should implement the following;

    Effective communication strategy:

    There is a need for mutual cooperation among different government agencies and parastatals, this collaboration should enhance exchange of information, and reduce the incidence of tax evasion as well as fraudulent tax practices.

    Create welfare schemes:

    To elicit voluntary compliance, the government should be more responsive to the welfare needs of the citizens. The Nigerian tax system can effectively generate more revenue when the citizens have trust and confidence in the authority. Lagos state in recent times is generating huge revenue due to the fact that many corporate bodies and individuals feel that they can visibly feel the development impact of their contributions

    Leadership by example:

    There is a need to enhance a positive tax culture; this can be done through the re-branding efforts of the ministry of information. In most developed countries, tax payment is considered a moral and civic responsibility, thus tax avoidance is frowned upon. This implies that our leaders should demonstrate patriotism through leadership that is worthy of emulation by timely payment of their taxes and discharging other civic duties.

    Partner religious organisations:

    In Nigeria, most of the citizens are religious and faithful people. Thus, with religious provisions that explicitly support fulfilling religious obligations, tax payment could be enhanced. Therefore, tax education can be encouraged to be part of religious education among the adherents. Evoking religious injunctions could elicit more voluntary compliance and reduce tax evasion and avoidance. For instance, the Biblical saying of “Give unto Caesar, what is for Caesar and to God what is for God” is apt and relevant to the Christians while the Qur’an calls on the Muslims thus: “O you who believe, fulfil all obligations” (Q5:1). *Civic education Civic education was part of the educational curriculum in the early 1960s and 1970s; however, this was stopped in the mid-1980s and 90s. A re-introduction of this into the school curriculum would not only improve civic responsibility but also infuse a sense of patriotism and commitment to national ideals and interests. There should be vigorous enlightenment and public awareness about tax payment and its importance in the economy.

    Dedicated phone lines/create social media platforms to handle complaints:

    There can be dedicated lines or emails, where issues, observations and queries can conveniently reach the authority; this will contribute to the reduction of tax fraud and avoidance.

    Elimination of all forms of multiple taxes:

    There is a need to harmonize the different taxes that are being levied by the different tiers of government so as to reduce the negative impact on the taxpayer. A situation where an individual pays rates and licenses to local government, pays sales tax and personal income to the state government and at the same time pays VAT is not one that will encourage voluntary compliance.

    Use of modern day technology for up to date database:

    To be able to track all potential taxpayers In Nigeria, an improvement in our tax revenue can be enhanced through a regularly updated, comprehensive database. This would enable the country to be able to track all potential taxpayers as well as to reduce incidences of tax avoidance.

    Elongated tax operation:

    In order to maximize the revenue accruing from tax collection and especially to fulfil the principles of convenience and economy on the part of taxpayers, collectors of tax should be made to operate on shift throughout the day.

    Simplified/indigenous tax laws:

    Tax laws should be codified in simple, non-technical language, if possible in the three major languages: Hausa, Ibo and Yoruba

    Judicial support:

    An effective judicial process to adjudicate on tax issue.

    List of approved taxes and levies for the three tiers of government.

    A list of approved taxes and levies for collection by the three tiers of government:

    (A) Taxes collectible by the Federal Government

    1. Companies income tax;

      (2) Withholding tax on companies;

      (3) Petroleum Profit Tax;

      (4) Value-added tax (VAT);

      (5) Education tax;

      (6) Capital gains tax – Abuja residents and corporate bodies;

      (7) Stamp duties involving a corporate entity;

      (8) Personal income tax in respect of: – Armed forces personnel; – Police personnel; – Residents of Abuja FCT; – External Affairs officers; and – Non-residents.

      (B) Taxes/Levies Collectible by State Governments

      (1) Personal income tax: – Pay-As-You-Earn (PAYE); – Direct (self and government) assessment; – Withholding tax (individuals only);

      (2) Capital gains tax;

      (3) Stamp duties (instruments executed by individuals);

      (4) Pools betting, lotteries, gaming and casino taxes;

      (5) Road taxes;

      (6) Business premises registration and renewal levy; – urban areas (as defined by each state): *maximum of N 10,000 for registration and N5 ,000 for the renewal per annum – rural areas – registration N2,000 per annum – renewal N 1,000 per annum

      (7) Development levy (individuals only) not more than N100 per annum on all taxable individuals;

      (8) Naming of street registration fee in state capitals

      (9) Right of occupancy fees in state capitals;

      (10) Rates in markets where state finances are involved.

      (C) Taxes/Levies Collectible by Local Governments

      (1) Shops and kiosks rates;

      (2) Tenement rates;

      (3) On and off liquor licence;

      (4) Slaughter slab fees;

      (5) Marriage, birth and death registration fees;

      (6) Naming of street registration fee (excluding state capitals):

      (7) Right of occupancy fees (excluding state capitals);

      (8) Market/motor park fees (excluding market where state finance are involved);

      (9) Domestic animal licence;

      (10) Bicycle, truck, canoe, wheelbarrow and cart fees;

      (11) Cattle tax;

      (12) Merriment and road closure fees;

      (13) Radio/television (other than radio/tv transmitter) licences and vehicle radio licence (to be imposed by the local government in which the car is registered);

      (14) Wrong parking charges;

      (15) Public convenience, sewage and refuse disposal fees;

      (16) Customary, burial ground and religious places permits; and

      (17) Signboard/advertisement permit.

      Nigerians might not necessarily need to be specially prevailed on to pay taxes if the evidences of the payment of such are clear for all to see. Therefore, accountability by appropriate government agencies in the disbursement and management of funds is key to raising a tax conscious populace.

  • FIRS shuts MRS Oil over N497m tax debt

    The Federal Inland Revenue Service on Wednesday closed down an MRS Oil’s facility in Lagos over a tax debt amounting to N497.1m, an action the agency described as part of measures being taken against tax-defaulting companies in the country.

    An enforcement team, led by Mrs. Anita Erinne, reportedly sealed off the premises of the MRS Oil and Gas Company Limited at 2,Tin Can Island Road, Apapa, Lagos.

    But the company said through its accountant, who identified himself simply as Samson, that it had cleared the debt.

    A statement by the FIRS said the chief security officer of the oil company ordered security guards to prevent the FIRS team from going beyond the reception area, leading to a two-hour argument during which the MRS Oil’s workers refused to vacate their offices as directed by the FIRS officials.

    When the argument ended, Erinne ordered the main gates to the company to be sealed off.

    “The team also visited Kaplan International College Limited situated at 1, Adeola Odeku Street, Victoria Island, which was also sealed over a N50.5m tax debt,” the statement added.

    The enforcement team had, on Tuesday, shut the premises of Amyn Investment Limited, situated at 21/25 Broad Street, Lagos. The company is said to be indebted to the tune of N12.5m.

    A similar fate befell Floorenzo West Africa Limited, situated at 6, Boyle Street, Lagos, which owes N310m, it stated.

    The FIRS gave the names of others affected by the closure as the FDHL, situated at 9/11, Osborne Terrace House, Udi Street, Osborne Ikoyi, said to own N22.3m; and Nadabo Energy Limited, whose debt was given as N24.9m.

    The enforcement team of the FIRS had last month sealed off four companies in Lagos and Port Harcourt for reportedly failing to meet their tax obligations totalling N630m.

    Erinne had told the defaulting firms that the companies’ premises would be unsealed when they cleared their outstanding tax bills.

    She warned the workers not to unseal or tamper with the FIRS seal until the debts were cleared and warned that any attempt to remove the seal would be a contravention of the law.

  • First class, business class air tickets will be taxed – Kemi Adeosun

    First class, business class air tickets will be taxed – Kemi Adeosun

    The Minister of Finance, Kemi Adeosun, on Thursday, said the Federal Government has signed a policy to tax first class and business class air tickets alongside other luxury goods.

    Adeosun made the remarks while answering live questions from Nigerians on Facebook.

    When asked her thoughts on taxing first class tickets and luxury coaches, the minister said, “I think yes”.

    “We signed something yesterday on luxury goods; champagne, brandy, whiskey, wine, jewelry, high-end jewelry,” Adeosun said.

    “We’ve signed something that will bill access charge on first class and business class tickets, we are just doing the final parts of the implementation and we also want to try and amend the tax payer book on high-end cars, luxury cars”

    Adeosun goes on to assure Nigerians that the taxes will be funneled into turning Nigeria into what it used to be and even better, adding that it will help in remodeling the country’s public social infrastructure.

    “If we move our tax-to-GDP ratio up, it means two things: One, we will be able to provide more services to our people. Many of the things we are not able to do are a function of the fact that we don’t have enough money.

    “We need to build more schools, we need to build more hospitals, we need to build more roads. This is not rocket science. Every country has challenges, there is nothing we are facing that other countries haven’t faced.

    “Every poor nation has very poor tax compliance rate and every rich nation has high compliance rate. So we want to be a prosperous nation. So what is in it for the citizens? If everybody pays, there will be far more money in the pool to be spent on the services that we need.

    “These things are what we call public goods, and they are funded from taxes. If you have been all around the country, you’ve seen the need, you’ve seen the number of people that are living in poverty, we can lift people from poverty if we have the right money.

    “We could do so much more in the economy if we had the money. If our public school system improves, many people who are currently paying school fees will move their children back into the public schools.

    “A lot of people that are very successful today were educated in public schools because the public schools were good; we can recreate that. Same with the health system. A lot of people die needlessly because we don’t have the right health facilities.”

    The minister says Nigerians living and working abroad, and paying taxes in those countries do not have to pay taxes in Nigeria.

  • Tax fraud: Messi escapes jail term, as court rules he pays €252,000 fine instead

    Lionel Messi and his father saw their suspended prison sentences for tax fraud reduced to fines by a Barcelona court on Friday.

    The pair had been convicted of hiding image rights royalties in offshore accounts and had been given suspended jail terms of 21 and 15 months.

    Messi will pay 252,000 euros ($287,000) and his father 180,000 euros.

    Messi will not spend any time in jail after the Barcelona court agreed that his 21-month prison sentence for tax fraud could be replaced with a fine of around €252,000.

    Messi’s father Jorge, whose original sentence was reduced to 15 months upon appeal, has also seen his punishment exchanged for a fine of around €180,000.

    Prosecutors first said last month that they were not opposed to the Barca star being fined €400 per day for the duration of the sentence, an option also put forward by the player’s defence team.

    A judge has now accepted that proposition put forward by prosecutors by making what should be the final decision in a case which has been ongoing for a number of years.

    Messi and his father were both found guilty of three counts of tax fraud totalling €4.7 million last year. In addition to their sentences, they were ordered to pay fines of €2m and €1.5m respectively.

    AFP

  • In Case You Missed It: Full Text of Executive order signed by Osinbajo on tax payment

    …as order takes effect today (July 1)

    The Acting President, Prof. Yemi Osinbajo, on Thursday signed Executive Order, No. 004 of 2017, to authorise federal and state governments to allow defaulting taxpayers to voluntarily declare their asset and income, pay due taxes and obtain some benefits in return.

    The Order followed the formal launching of the Voluntary Asset and Income Declaration Scheme, VAIDS, which guarantees amnesty for voluntary tax defaulters.

    It is also part of government’s efforts to increase tax awareness and compliance, and grant tax payers a time-limited opportunity to regularise their tax status without penalty.

    Read the full executive order below:

    Full Text of Executive Order No. 004 of 2017 on the Voluntary Assets and Income Declaration Scheme, VAIDS, signed on Thursday, June 21, 2017 by the Acting President, Yemi Osinbajo

    Whereas the Constitution imposes a duty on every citizen to declare his/her income fully and honestly to appropriate and lawful agencies and pay taxes promptly;

    Whereas every taxable person is under obligation to voluntarily declare his/her income from all sources within and outside Nigeria by filing annual tax returns, computing same and paying the tax due to the tax authority;

    Cognisant of the desirability of inculcating in all citizens, the ethics of responsibility to the nation, accountability, and honesty;

    Aware that the Federal and State Governments owe citizens the duty of providing security, welfare and development in all its parameters; and

    Consequent upon the determination of the Federal and State Governments to provide an opportunity for taxpayers who are in default under all relevant Statutes to voluntarily declare their Assets and Income and pay taxes due on them and in return obtain some benefits.

    NOW THEREFORE, PURSUANT TO THE AUTHORITY VESTED IN ME BY THE CONSTITUTION AS THE ACTING PRESIDENT OF THE FEDERAL REPUBLIC OF NIGERIA, I HEREBY ORDER AS FOLLOWS:

    1. The Federal Ministry of Finance shall set up a Voluntary Assets and Income Declaration Scheme (hereinafter referred to as “the Scheme”) for all categories of taxpayers who have defaulted in payment of taxes due and collectible subject to the fulfilment of the terms and conditions as may be stipulated in this Order and other subsequent complementary regulations.

    2. The Scheme shall provide a nine (9) month period commencing from the 1st of July 2017 for taxpayers who are in default of their tax liabilities to declare their assets and income from sources within and outside Nigeria relating to the preceding six (6) years of assessment.

    3. The Scheme shall encourage and provide an opportunity for eligible taxpayers to:

    a. regularise their tax status for all the relevant years;

    b. pay all outstanding taxes;

    c. prevent and stop tax evasion; and

    d. ensure full tax compliance.

    ELIGIBILITY TO PARTICIPATE

    4. The Scheme is open to and targeted to all persons and entities that are in default of their tax liabilities in any way whatsoever, including those who:

    a. earn an income or own asset but are yet to register with the relevant tax authorities;

    b. are registered taxpayers who have additional disclosures to make or need to amend prior disclosures; and/or are registered but have not been filing returns;

    c. have not been fully declaring their taxable income and assets;

    d. have been underpaying or under remitting;

    e. are under a process of tax audit or investigation with the relevant Tax Authority; and/or

    f. are engaged in a tax dispute with the relevant Tax Authority but are prepared to settle the tax dispute out of court.

    REQUIREMENTS FOR VALID DECLARATION

    5. In order for an application pursuant to the Scheme to be valid, the following requirements must be met:

    a. the disclosures by the taxpayer should be voluntary;

    b. the disclosure must be full, frank, complete and verifiable in all material respects;

    c. the disclosure must be made using the Voluntary Asset and Income Declaration Scheme forms or in any other form or manner as may be prescribed under the Scheme; and

    d. the assessment of tax payable must be carried out by relevant tax authority.

    RELIEFS/BENEFITS

    6. Any taxpayer who truthfully and voluntarily declares his asset and income, complies with the regulations and guidelines and pays all outstanding taxes shall obtain the following benefits.:

    a. immunity from prosecution for tax offences;

    b. immunity from tax audit;

    c. waiver of interest;

    d. waiver of penalties; and

    e. option of spreading payment of outstanding liabilities over a maximum period of three years as may be agreed with the relevant tax authority.

    Provided however that the remission or waiver granted under these Regulations shall not prejudicially affect or invalidate any court order or judgment already obtained in respect of any default in payment of tax for which interest and/or penalty have already accrued.

    7. The reliefs referred to in paragraph six (6) above are available in respect of all taxes administered by the Federal Inland Revenue Service as well as those administered by all State Boards of Internal Revenue.

    CONSEQUENCES OF FAILURE TO COMPLY

    8. Failure of any defaulting taxpayer to truthfully and promptly take advantage of this Scheme shall at the expiration of the Scheme result in the following consequences:

    a. liability to pay in full, the principal sum due;

    b. liability to pay all interest and penalties arising therefrom;

    c. liability to be prosecuted in accordance with relevant extant laws for tax offences;

    d. withdrawal of any reliefs, which may have been granted to the participant;

    e. liability to undergo comprehensive tax audit; and

    f. any sum paid in relation to the Scheme may be counted as part payment of any further outstanding tax in respect of undisclosed information.

    CONFIDENTIALITY OF INFORMATION

    9. All information provided by the taxpayer under the Scheme shall be treated with utmost confidentiality in accordance with the provisions of the relevant laws save where it is stated otherwise.

    10. Any tax official or persons duly authorised to receive information under the Scheme who breaches the confidentiality of information received or exchanged under the Scheme without due authorisation or in breach of relevant laws shall be liable to prosecution under extant Federal and/or State Laws.

    GENERAL

    11. This Executive Order is valid only for the period in which the Scheme shall subsist, and relates to only persons who have voluntarily declared their assets and income within and outside Nigeria for the purpose of ascertaining their outstanding tax liability.

    Provided however that any rights and status properly acquired by any participating taxpayer pursuant to the Scheme shall vest to the benefit of the taxpayer to the extent provided for by law.

    12. This Executive Order shall be read in conjunction with all extant Tax Laws, Regulations and Guidelines as well as those that may be issued pursuant to the Scheme.

    13. This Executive Order shall take effect from the 1st day of July 2017.

     

  • BREAKING: Ronaldo summoned for July 31 tax hearing

    Real Madrid star Cristiano Ronaldo, accused of evading 14.7 million euro ($16.5m) in tax, has been summoned to appear before a judge in Spain on July 31, judicial sources told AFP on Tuesday.

    The 32-year-old Portuguese star is facing four charges of fraud through offshore companies between 2011 and 2014.

    Ronaldo has denied the charges.
    Details soon

  • EGRP: We must divert attention from oil to revenue generation, mobilization – Adeosun

    EGRP: We must divert attention from oil to revenue generation, mobilization – Adeosun

    The Minister of Finance, Mrs Kemi Adeosun, has said that the best road map to economic recovery for Nigeria is to frontally and finally face other sources of revenue generation and mobilization from taxes and by encouraging local production, instead of relying on oil and borrowings.

    “The problem is not that our debt service is too high, but our revenue is too low and the manner in which the imbalance between our debt service and revenue will be corrected, apart from re-balancing our borrowings in favour of longer tenure loans and external sources, is by finally and frontally facing the issue of revenue.”

    Adeosun gave the advice while delivering a keynote address at the NSE-Bloomberg CEO Round Table in Lagos on Friday. She noted that revenue mobilization is critical to the success of Nigeria’s economic reform agenda in these critical times.

    TheNewsGuru.com reports that the minister had earlier announced plans to recruit and train 7,500 Community Tax Liaison Officers under the N-Power scheme where young people will be subjected to a rigorous and intensive education on the tax system, sales, communication skills and civic education before being deployed to their communities to provide tax education and enroll new tax payers.

    A statement signed by the Director of Information, Ministry of Finance, Salisu Na’inna Dambata and made available to journalist in Abuja, also quoted the Minister as saying: “For the size of our Government, the size of our economy and the size of our needs, government revenue is simply just too low. We see increasing revenue as the long-term strategic solution for sustainable and inclusive growth. Revenue is required in the short-term for investments and in the medium to long-term for our debt service.”

    The Minister explained that government’s acceptance that her ambitions cannot be financed by oil revenue is an equal acceptance that there is a finite limit to how much can, and should be financed by debt. If we don’t want to borrow, we need more revenue.

    She noted: ‘‘The problem is not that our debt service is too high, but our revenue is too low and the manner in which the imbalance between our debt service and revenue will be corrected, apart from rebalancing our borrowings in favour of longer tenure loans and external sources, is by finally and frontally facing the issue of revenue.”

    Commenting on the limitation of relying on oil, she stated: “We believe that Nigeria is an ‘oil-plus’ economy and we should model ourselves after countries that have similar profiles like Egypt with a population of 91 Million and 490,000 barrels of oil per day (185 people to a barrel of oil) and has a highly diversified revenue base.”

    She further explained that we cannot model ourselves after Saudi Arabia, with their 30 million population and 10 million barrels of oil per day (three people to a barrel of oil). In Nigeria, we have a population of close to 180 million people and about 2 million barrels of oil per day (90 people to a barrel of oil). We must, therefore, diversify our revenue base.

    Adeosun added that revenue mobilisation, is therefore, critical to our success. “Revenue mobilisation is critical to the success of Nigeria’s economic reform agenda and we are working on strategies to drive non-oil revenue growth. To do this, we must amend Nigeria’s low level of tax compliance. A tax to GDP ratio of just 6 per cent, is just too low and we are working to amend this,” she said.

    According to her, Nigeria is doing more with less and we will continue to do so. Growth is returning, investor confidence is reawakening and that confidence is based on an economic blueprint, which, if followed doggedly, would take us from the rough road, onto a path of sustainable and inclusive growth.

    Other speakers at the Round Table included Dr. Doyin Salami of Lagos Business School, Mr. Andrew Alli, the President/Chief Executive Officer, Africa Finance Corporation and Mr. Oscar Onyema, the Chief Executive Officer, Nigerian Stock Exchange, among others.