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HOW THE DECISION TO TAKE ADVANTAGE OF VAIDS CAN MAKE A HERO

The window of opportunity provided by Voluntary Asset and Income Declaration Scheme VAIDS is for individuals and companies to regularise thier tax liabilities. This scheme has commenced since 1st July 2017 and it will end by 31st March 2017.

The Opportunity

There is one sure thing about all opportunities.That thing is that opportunity is tied to time. By the time you see an opportunity you will also observe that except you grab it there and then will it not fly past you.

The Thinking

One of the great men in history who seized such an opportunity before it slipped from him as in tapestry.. Untill tomorrow we’ll continue to use the phrase, “a stroke of luck”. How did the stroke became a luck?  One common feature of all heros is that become  great after they have passed through a trial, a test or an ordeal. How a hero has approached the test,  how decisive he has acted and the choice he has  made when faced moral or ethical dilemma. After the hero’s darkest hours  he overcome, claims his treasure and comes to light and we see and say, “stroke of luck”. 

Making Decisions

Alexander the great was very decisive and with a stroke cut through the Gordian knots at once. That’s how he solved his world most complex problem in 323BC- thinking out of the box. Alexander in history is one among many that can not be ignored in the art or science of decision making.

The Deadlock

The age long disputation of why should the taxpayers pay the next tax dues while the government has not given proof, by way of projects execution with the last, taxes revenue collections. So long this argument subsist so long, it has unending dead lock, an aporia that keeps begin for answer.

The Way Forward

If the argument will like to return back both the government and the taxpayers may not meet it at the point they left it. Why? Because the internet and the information revolution is providing government a huge incentives couple with cooperation across borders. The tax radar can beam as far as the distant governments have  pacts to share and exchange information on citizens.

 Go ask an accountant, s/he knows that “the taxman knows you”. Every hero needs a helper to help him to conquer his fear. There is the treasure in VAIDS.

 

​CHANGING THE NARRATIVES OF THE NIGERIA TAXATION LANDSCAPE

Taxation will soon become a sizzling and scintillating topic to discuss as politics is generally discuss everywhere. All the citizens will join in discussion with the government spheres, join in discussion with the tax professionals circles that are all the while a little comfortable discussing taxation. There are candid reasons why the subject of taxation has created lots of apathy among the citizenry in general.

Nigeria is a developing a country with a very slow growth in infrastructural development across sectors: power, defence, health, transportation, education among others despite the huge earnings from oil which averages at all times about 35% of the GDP. To the dismay of the citizens the funds that are budgeted and meant for the infrastructures expansion and maintenance are usually looted by the leaders undeterred. The Institutions like the police and the judiciary are already pervaded and weakened by corruption and consequently citizen will ask, “Where is the hope of the common man?”

During the 2017 USA presidential election campaign and between the two major contestants, taxation ranked the number two at the top of other major policies of influence to the voters. Taxation issue was the number one political canon that Hillary Clinton fired at Donald Trump and its echo continued to reverberate long after Trump’s inauguration.  At least Hillary won the opinion poll!
If the new executive order on taxation signed by the Nigeria acting president on the 29th June 2017 comes on board as planned then one can pull a bet that in 2019, the Nigeria general election will replicate the scenario we witnessed at the USA 2017 presidential election one way or the other.
WHAT’S VAIDS

The Nigeria goverment tax amnesty, the Voluntary Assets and Income Declaration Scheme –VADIS, an open hands to:

  • Individuals and corporate bodies to approach the SIRS and FIRS and make true and full disclosure of their income and assets.
  • Make honest declaration and be free from payments of penalty and accrued interest on the unpaid taxes.
  • Those who seize the opportunity within the time frame, 1st July 2017 to 31st March 2018 will be free from tax investigation and litigation for the 2011 to 2016 years of assessment.

VAIDS AIMS FOR IMPACTS

The civic duty of every citizen to pay tax will not be restricted to the people in formal employment. Most of the upper class will be under tax searchlight.

  • The tax data base will be widened.
  • The Nigeria tax to GDP ratio will increase from the very low single digit of 6% to double digit as it is in other developing countries.There will be increase in resources to upgrade infrastructural defecit.
  • Citizens will be better focus on the government for transparency and accountability.

VAIDS FACTORS OF INFLUENCE

The success of VAIDS and subsequently government increased earnings from taxation will be spur by the global practice in the Internet enable age and information revolution that facilitate unique identification of citizens across platform like the Bank Verification Number, Tax Identification Number, Mobile Phone Number. There are treaties signed by the government at the international level to allow information sharing on funds flow across border and signing of memorandum of understanding between the federal government and the states government.

It is also expected that the civil society will brace up for the challenges that may wanted to hindered the success or abuse of the system from the  realisation of its full benefits to the nation and the citizens in particular.

The time is approaching when the discuss about taxation will no longer produce dizziness or narcolepsy on the citizens as it has prevented robustness of debating its economic and political implications

The time is nigh when the people will genuinely ask the government, what are you doing with the tax payers money?

Tax Amnesty: Three Important Stages in Personal Income Tax Compliance

The first is the filling of annual return using  Form A as approved by the Joint Tax Board.

These form is made of five parts. Part A is to elicit tax payers personal information like name, mailing address and so on. The most significant part is the part B, on income disclosure.There are other parts: ‘C’ for the disclosure of fringe benefits. Fringe benefits are non monetary sweeters to higher level officials ,  it include official cars, residential apartments solely paid for by the employer They are taxable in the hand of the beneficiaries at the 5% rateable or market value. 

Part C, is rarely invoked as you can see in the payslip of a top government official (below), no disclosure! Parts D & E are schedules for immovable property and capital allowance claim, both are taken care of in the balance sheet. While part F are supporting documents for Pension and insurance schemes.

One of the quality of a good taxation is that it must be fairly determinable. Therefore a slice rates of graduating tax rate is always included in the form.  We’ll use a publicly available payslip to demonstrate the personal income  tax computation (continue from the Form A, Part B above).

As it shows the amount of total tax payable is N671, 429.97 divided by 12 calender months gives N55,952.50 which perfectly reconcile with his payslip (see below):

In conclusion the level of tax compliance in any country and Nigeria will have a direct relationship with equally a high level of transparency and accountability and not a high level government dependence on taxes in absence of, and or depletion of other natural resources. To that extent the VAIDS- Voluntary Assets and Income Declaration Scheme or Nine months window of Tax Amnesty can yield positive results.

Introduction To Accountantsplus Blog

We are very excited that our long conceived idea is now given a birth to on with the  lunching of this platform. In course of our chosen careers cum experiences we have gathered in workplaces and through interactive engagements with the  various business communities and regulators we have been able to identified potentials in helping to solved business problems using our skills and experiences as seasoned accounting professionals.

There can be know better time than now when the government focus is to encourage foreign investors, encourage fund inflows from nationals abroad and encourage entrepreneurs among her teeming population. This has been tagged as Ease of Doing Business in Nigeria.

The regulator in charge with the responsibility of incorporation and and registration of business in Nigeria the Corporate Affairs Commission – CAC  has moved the larger part of its offices to the Internet sites. We have been able to see some of clients freshly incorporated within a week and at a significantly reduced company’s formation cost. Hitherto the cost used to be huge and often capitalised and to be written off against corporate profits of some initial years but now it can be expensed within year.

The government of Nigeria Ease of Doing Business also involve process changes in the National Passport and International ViSA application processing by the Immigration Service and like the CAC is yielding positive results.  There are ‘gang planking’ a sort of integration between these organisations and the FIRS to facilitate across portals interactions and it has been able to removed duplications of visits to different offices or sites as it were.

Both the government and her citizens are aware of low tax remittance compliance.

There are processed data that the small scales to medium sizes range of business are in some cases not aware of their tax obligations and others that are aware, they have no technical accounting supports services to generate the necessary information needed.

The data also shows that current rate of tax compliance is about 12%  and the reasons for this is in deliberate tax evasson attributable to equally low tax payer education. These emergent problems can be addressed to the satisfactions of all the stakeholders.

Ours business is to assist these stakeholders through business developmental ideas, accounting support services, effective tax planning and  effecient tax execution.