Nigeria: FG plans new tax scheme expected to generate $1 bn in revenue
(Ecofin Agency) - The Federal government has revealed plans to introduce a new tax scheme expected to generate an estimated $1 billion in the next three years. This new scheme is aimed at tackling tax evasions and illegal financial flows in the country.
“The proposed Nigeria Voluntary Asset and Income Declaration Scheme (VAIDS) will capitalize on the current global movement against tax evasion and illicit financial flows and will offer a window for those who have not complied with extant tax regulations to remedy their position,” said Babatunde Fowler (photo), the Chairman of the Federal Inland Revenue Service (FIRS).
According to Fowler, the new policy will take effect from May 1 to November 2017 and would embrace all federal and state taxes. He noted that Nigeria has the lowest non-oil tax to GDP at 6% as out of the 40 million Nigerians expected to pay tax, about 14 million are yet to pay their taxes.
“The VAIDS scheme targets to increase the tax to GDP ratios to 15% from just 6% by 2020. VAIDS scheme will 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.”