The Chartered Accountants in the country have been advised leverage the opportunity provided in the recently launched Voluntary Assets & Income Declaration Scheme (VAIDS) by the Federal Government, to educate their clients, employers and the general public.
Taiwo Oyedele, PwC Partner, West Africa Tax Leader & President, Impact Africa Foundation, gave the advice at fourth edition of the Chartered Accountants’ Annual Empowerment Summit organised by the Professional Accountants Christian Ministry (PACM) in Lagos.
He reiterated that accountants must begin to engage governments at all levels and demand full accountability. “It is high time Nigeria’s citizens started asking politicians and public office holders tough questions in order to hold them accountable”, Oyedele said.
VAIDS is an initiative designed to encourage voluntary disclosure of previously undisclosed assets and income for the purpose of payment of all outstanding tax liabilities. The Scheme is designed to be implemented by the Federal Inland Revenue Service (FIRS) in collaboration with all Internal Revenue Services at the 36 States of the federation as well as the FCT.
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Oyedele said that the Federal Government plans to gather intelligence through local and international sources to support the prosecution of defaulting taxpayers or those making false declarations. He said an international forensic and asset tracing company has been engaged to support this arrangement. The overarching objectives of the scheme include to increase tax remittance compliance, raise government revenue, move the Tax to GDP ratio upward (between 10% and 15%), broaden the national tax base and discourage illicit financial flows.
Oyedele also highlighted that Nigeria’s Tax to GDP, which currently averages 6%, is one of the lowest in the world; occupying the same level with countries like Iran, Afghanistan, Chad etc. This total tax revenue has not been sufficient to meet government’s annual recurrent expenditure. Hence, the government has resulted to borrowing to finance capital expenditure.
He advises Government agencies to be more transparent and efficient in order to encourage more Foreign Direct Investments and move up in the ease of doing business index. Oyedele was optimistic that VAIDS has the capacity to meet the $1 billion target set by government specifically for the scheme and exceed it.
This year’s Summit reviewed the current state of the Nigerian economy and appraised its impact on the post-recession exit. It also discussed the workability of recently launched VAIDS.
Speaking to journalists immediately after the summit, Oyedele said “borrowing is a big problem for Nigeria. Our depth to GDP ratio is low by global standard it is under 20 percent, but in countries like US, it is 90 percent. The problem we have is that we don’t have enough revenue to support our borrowing so when you borrow, you have to service it and you have to pay back. Because our tax to GDP is so low, we don’t have money to pay back and because we need to take care of infrastructure, pay salaries of civil servants and so many other things, government has no choice than to borrow. So we must do something differently so that we can stop borrowing and be able to raise money internally to fund infrastructure and development and that is where tax comes in for example”.
HOPE MOSES-ASHIKE
