The Federal Inland Revenue Service (FIRS) and the Joint Tax Board (JTB) will soon start what they refer to as a “full-scale enforcement exercise” against defaulting taxpayers who did not benefit from the amnesty offered by the Voluntary Assets and Income Declaration Scheme (VAIDS) of the federal government.
The tax bodies announced that a full-scale enforcement exercise, including prosecution, is to start right away on defaulting taxpayers who did not use the VAIDS scheme in a public notice titled “Post-VAIDS Enforcement and Prosecution Exercise” and signed by Muhammad Nami, the Executive Chairman FIRS who also serves as the Chairman JTB.
The Joint Tax Board (JTB) and the Federal Inland Revenue Service (FIRS) are starting a comprehensive enforcement effort, which will include prosecuting defaulting taxpayers who did not benefit from the Scheme, according to the notice. The appropriate provisions of the tax laws will be applied to the defaulting taxpayers’ tax assessments.
JTB recommended taxpayers who had unpaid tax obligations that had previously been declared under the Scheme to settle their unpaid debts right away to prevent the withdrawal of the Scheme’s reliefs.
The Voluntary Assets and Income Declaration Scheme (VAIDS), Executive Order No. 004 of 2017, gave taxpayers who were behind on their tax obligations the chance to voluntarily declare their assets and income, pay the taxes owed on them, and in exchange receive benefits like amnesty from prosecution for a year starting on July 1, 2017.
The plan also stated that individuals who took advantage of the amnesty would be eligible for tax benefits like immunity from prosecution for tax offenses, immunity from a tax audit, waivers of interest and penalties, and the option to spread out the payment of outstanding debt over a maximum of three years.
However, the Executive Order had warned that failure to comply with the plan would result in responsibilities for the guilty taxpayer, including the obligation to pay the principal amount in full as well as any accrued penalties and interest. This also includes the taxpayer’s thorough tax audit and the removal of any given reliefs.
Following a Post-VAIDS Stakeholders’ Webinar hosted by the FIRS on June 6, 2022, this Post-VAIDS enforcement and prosecution activity is being conducted.
During the webinar, Executive Chairman of FIRS Muhammad Nami stated that less than 20 million of Nigeria’s roughly 68 million enterprises have active taxpayer status, according to data from the National Bureau of Statistics.
The Post-VAIDS operations were a way for companies and people to voluntarily declare their assets and income, register to pay tax, or face full enforcement action by the Service, he said, adding that this compliance gap needed to be closed by enforcement of compliance.