- FG’ll Prosecute Tax Defaulters Who Shun VAIDS – Adeosun
The Minister of Finance, Mrs. Kemi Adeosun, on Tuesday said that the Federal Government would prosecute tax defaulters who fail to take advantage of the nine-month amnesty period offered under the Voluntary Assets and Income Declaration Scheme.
The VAIDS was established on June 29, 2017 via an Executive Order signed by Vice President Yemi Osinbajo, who was then Acting President, as a broad spectrum solution to virtually all the defects in the country’s tax system, including negativity towards taxation.
The first phase of VAIDS runs from July 1, 2017, while the second phase ends on March 31, 2018.
According to her, sanctions await defaulters who refuse the Federal Government’s offer of amnesty, including the full payment of outstanding tax liabilities and criminal prosecution.
She stated that businesses, which untruthfully comply, would be liable as whatever was paid on the declared liabilities would be considered as part-payment of the outstanding sums later discovered by the authorities.
Adeosun advised Nigerians to review any existing tax planning schemes, including those in offshore tax havens, in order to take advantage of the VAIDS to regularise their tax status where necessary.
She stated that while the use of tax avoidance schemes was legal, tax evasion was not.
Adeosun said, “The critical question to be asked of all Nigerian taxpayers using offshore tax shelters will be whether all applicable taxes have been paid prior to the transfer of funds or assets to a tax shelter.
“If all taxes had been paid, then there will be no additional liability except tax payable on further income earned on those funds. However, if taxes had not been paid, then the use of such schemes is illegal.”
She urged users of offshore tax shelters to promptly embrace the VAIDS scheme to regularise their status, adding that Nigeria’s low tax revenues were at variance with the lifestyles of a large number of its citizens and with the value of assets known to be owned by Nigerians resident around the world.
The minister added, “The VAIDS ushers in an opportunity to increase the nation’s general tax awareness and compliance. It is a time-limited opportunity for taxpayers to regularise their tax status relating to previous tax periods.
“In exchange for fully and honestly declared previously undisclosed assets and incomes, taxpayers will benefit from forgiveness of overdue interest and penalties, and with further assurance that they will not face criminal prosecution for tax offences or be subject to tax investigations.”
Adeosun explained that with the increasing global focus on illicit financial flows and tax evasion, offshore tax shelters no longer offered robust protection against tax authorities.
She added that the continued use of such schemes posed enormous risks for the users.
Meanwhile, the Voluntary Assets and Income Declaration Scheme Office has launched a video campaign to create awareness about the programme, promote voluntary tax compliance and boost tax education among Nigerians.
This was disclosed in a statement by the initiator of the programme, the VAIDS Office domiciled in the Federal Ministry of Finance.
According to the statement, the campaign on YouTube at bit.ly/VAIDSVideos, features short videos and skits depicting various scenarios of persons attempting to evade their taxes.
By its provision, the VAIDS gives tax defaulters a time-limited opportunity to regularise their tax affairs by truthfully declaring and paying outstanding liabilities.
The VAIDS was conceived by the Federal Ministry of Finance in collaboration with federal and state tax authorities to correct the defective tax orientation in the country and reflects the desire of the Federal Government to widen the tax net, while offering benefits to defaulters, who voluntarily and truthfully declare their assets and pay tax liabilities.
Benefits accruable to individuals and corporate bodies, who comply with the VAIDS include immunity from prosecution, tax audits as well as waivers of interest and penalties on unpaid taxes. They also include the option of spreading outstanding liabilities over a maximum period of three years as may be agreed with the relevant tax authorities.
Nigeria’s Non-oil Revenue Now N1.15 Trillion – Minister of Finance
Mrs. Zainab Ahmed, the Minister of Finance, Budget and National Planning, has said that Nigeria’s non-oil revenue is now N1.15 trillion, representing 15.7 percent above the country’s target. This, she claimed, was a result of the federal government’s efforts at diversifying the nation’s economy.
Mrs. Ahmed disclosed this at the Institute of Directors (IoD) 2021 Annual Directors Conference which was held on Wednesday in Abuja.
According to the News Agency of Nigeria (NAN) the event with the theme: “Creating the Future: Deepening the Corporate Governance Practice through Multi-Sectoral and Multi-Generational Collaborations,” was meant to discuss economic development.
Mrs Ahmed added that the recent development was in line with President’s commitment to further diversifying the Nigerian economy which is heavily dependent on oil. She observed that Nigeria was showing resilience in recovery from recession from coronavirus (COVID-19) pandemic which intensely affected global economies.
The minister said the federal government alongside the private sector had implemented a wide range of monetary measures to stimulate economic recovery, growth and development, job creation and improved standards of living.
She also explained that the government was doing everything to improve and diversify Nigeria’s revenue generation.
“Nigeria was quickly able to exit recession and is on her way to path of sustainable growth and we are intensifying efforts to grow and diversify our revenue sources to grow revenue from the current 8 per cent.”
“Our non-oil revenues have grown to N1.15 trillion, representing 15.7 per cent above set target. We are working on the 2021 finance bill and it’s nearing completion. Also, the recent approval of the medium-term national development plan is an important milestone of Buhari’s commitment to delivering sustainable growth and we require strong support and monitoring during implementation,” she said.
Mrs Ahmed reinforced the government’s decision to do something about infrastructure and reduce the cost of production for businesses in the country.
Intra-Regional Trade Potential a Key Focus in New Report
A new focus report, produced by Oxford Business Group (OBG) in partnership with the African Economic Zones Organisation (AEZO), shines a spotlight on the continent’s rapidly developing industrial sector, which is poised to become a key driver of broader economic growth as regional integration increases.
Titled ”Economic Zones in Africa – Focus Report”, the report was launched at the AEZO’s 6th Annual Meeting II, which took place on November 25 at the African Continental Free Trade Area (AfCFTA) Secretariat office in Ghana, with participants also able to attend remotely. The meeting was held under the banner “Connecting African Special Economic Zones (SEZs) to Global Value Chains at the era of the AfCFTA” and explored a range of topical issues relating to SEZs, from their potential to boost trade to the impact of Covid-19 on the continent’s supply chains.
The focus report examines the wealth of benefits that the AfCFTA is expected to deliver to both Africa’s economic zones and the businesses located in them, which range from greater market access to a reduction in trade barriers and lower production costs.
The disruption that the pandemic brought to supply chains and the opportunities emerging from the health crisis for businesses to become part of nascent regional value chains across a more closely connected continent are a key focus.
The report also charts the digital transformation taking place in many of Africa’s economic zones, as businesses make the move away from traditional segments to high-tech processes and digital services, adding value to their offerings in the process.
In addition, it provides in-depth analysis of the drive evident among many SEZs to put environmental, social and governance principles and sustainable business practices at the heart of their strategies, at a time when ethical investment and alignment with the UN Sustainable Development Goals are high on the global agenda.
The report includes in-depth case studies and viewpoints by representatives from key industry players namely: Tanger Med; Polaris Parks; Lagos Free Zones; Ghana Free Zones Authority; Misurata Free Zone; and Sebore Farms.
It also includes a contribution from Ahmed Bennis, Secretary General, AEZO, in which he highlights the role that SEZs are playing in the continent’s industrial transformation and the importance of supporting their development.
“Economic zones can play a game-changing role in Africa’s diversification and inclusion by providing end-to-end solutions and services that support industrial upgrades and increase countries’ attractiveness for investment,” he said. “With the implementation of AfCFTA and the post-Covid-19 recovery that the world is beginning to experience, we believe that real investment opportunities exist in Africa at this moment, which can translate into job creation and social and economic development. Africa has resources that need to be developed and economic zones can play a key role in this.”
Bernardo Bruzzone, OBG’s Regional Editor for Africa, added that while African economic zones had experienced production problems during the pandemic due to global supply chain disruptions, ongoing remedial action, including new infrastructure and human capital development, would help provide resilience against future external shocks.
“Africa’s real GDP growth is forecast to reach 3.4% in 2021, with an increase in intra-regional trade and improved connectivity among the facilitators of economic recovery,” Bruzzone said. “Looking ahead, we see economic zones as having a key role to play in helping the AfCFTA achieve its potential through the development of new strategies that will lead to a more diverse, higher-value range of exports.”
The study forms part of a series of tailored reports that OBG is currently producing with its partners, alongside other highly relevant, go-to research tools, including a range of country-specific Growth and Recovery Outlook articles and interviews.
Lagos Budget N1.4 Trillion for 2022, Budget Surpasses Five Other Southwest States Combined
Lagos state government has proposed N1.388 trillion budget for the year 2022. The proposed budget was presented to the House of Assembly on Wednesday.
While presenting the proposed budget, Governor Babajide Sanwo-Olu said the State would be spending N325 billion on vital infrastructure projects in key sectors to energise and expand the growth of the State’s economy.
The key areas of growth identified by the Governor include Works and Infrastructure, Waterfront Infrastructure Development, Agriculture, Transportation, Energy and Mineral Resources, Tourism, Entertainment and Creative Industry, Commerce and Industry, Wealth Creation and Employment.
The proposed budget, christened “Budget of Consolidation”, will be the last full-year fiscal plan of the State before the next general election.
About N823.4 billion, representing 59 per cent of the 2022 budget, is earmarked for capital expenditure. Recurrent expenditure, representing 41 per cent, is N565 billion, which includes personnel cost, overhead and debt services.
Of the total proposed expenditure, N1.135 trillion would accrue from Internally Generated Revenues (IGRs) and federal transfers, while deficit financing of N253 billion would be sourced from external and domestic loans, and bonds projected to be within the State’s fiscal sustainability parameters.
The State would be earmarking an aggregate of N137.64 billion, representing 9.92 per cent of the 2022 budget, for the funding of green investment in Environment, Social Protection, Housing and Community Amenities.
“This financial proposal is presented with a sense of duty and absolute commitment to the transformation of Lagos to a preferred global destination for residence, commerce, and investment. The budget projects to see a continuing but gradual recovery to growth in economic activity as the global economy cautiously recovers from the impact of the Coronavirus pandemic,” the governor said while presenting the budget to the house.
Meanwhile, the 1.388 trillion budgeted for 2022 is higher than the budget of the five other southwest states combined. For 2022, Ekiti State’s budget is 100.7 billion, Osun 129.7 billion, Ondo 191billion, Oyo 294 billion. Ogun’s budget for 2022 is not yet finalised, but going by their 2021 budget of 339 billion, the combined budget of the five South-West states then amount to 1.053 trillion. With this, Lagos state budget is higher than the five states budget with a difference of 335 billion.
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