Presidency, Governors angry with multinationals for evading Tax, frame new policy
The Presidency and governors of the 36 states of the federation, sitting today at the National Economic Council (NEC) meeting, frowned at what they called under-payment of tax via the use of Tax Havens and other evasion strategies. The major culprits, they said, are multi-national companies and high net worth individuals.
NEC is worried that Nigeria has one of the lowest non-oil tax to GDP ratio at 6 percent, even as they came up with what they termed “Nigeria Voluntary Asset and Income Declaration Scheme (VAIDS)” which they said will capitalise on the considerable international goodwill built by President Muhammadu Buhari in his mission to rebuild Nigeria.
The VAIDS, they said, will also capitalise on the current global movement against tax evasion and illicit financial flows.
“It will offer a window for those who have not complied with extant tax regulations to remedy their position by the provision of limited amnesty to enable voluntary declaration and payment of liabilities.
“The target of the VAIDS scheme is the increase of the country’s tax to GDP ratio 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
“VAIDS scheme will embrace all Federal and States’ taxes such as Companies Income Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duties, Tertiary Education Tax, & Technology Tax.
“The scheme is targeted to start from May 1, 2017 and incentives will be put in place to encourage early participation
“Revenue expected from the scheme conservatively estimated at US$1 billion.
“Based on initial estimates, it is anticipated that at least 50% of the funds recovered will belong to States who are
the ultimate collectors of personal income taxes.”
NEC approved the scheme in principle, while additional inputs are to be considered.
The Council also deliberated on other issues as follows:
BRIEF ON NATIONAL SECURITY ISSUES BY THE NATIONAL SECURITY ADVISER
The NSA briefed the Council on the Security situation in the country with particular reference to:
Boko Haram insurgency in the North-East
Ethnic militias/security outfits
Militancy in Niger Delta
Proliferation of small arms across the country
The NSA fingered unemployment as the major security concern.
In their responses, Council members highlighted the potential role and significance of the Federal Government’s Social Investment Programmes in averting some of the security concerns and encouraged an active implementation going forward.
Council resolved to hold an extra-ordinary session to fully discuss pertinent national security matters especially as it has to do with the economy.
NEC WELCOMED PRESIDENT
The Council welcomed the President, President Muhammadu Buhari, who had a brief interaction with Council members today. The Governors thanked him for his several supportive policies to the States. The President had met briefly with the Governors during a short break in Council deliberation.
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C REPORT ON EXCESS CRUDE PROCEEDS
The Honourable Minister of Finance also reported to Council that the balance in the Excess Crude Account (ECA) as at 15th March, 2017 stood at US$2,45,864,724.59, recording a marginal increase of US$2,458,382,882.03
Finance Minister added that the ECA balance does not reflect as yet the decision of Council last month to deduct $250 million for injection into the Sovereign Wealth Fund
STABILIZATION FUND ACCOUNT
The Stabilization Fund Account (SFA) is an account equivalent to 0.5% of the Federation Account allocated and paid into a fund to be designated (Stabilization Account) from where any State of the Federation that suffers absolute decline in its revenue arising from factors outside its control, shall tap in, to augment the allocation to that State.
Based on the above, the Hon. Minister of Finance informed Council that the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) recently approved for disbursement (N39,613,282,870.69) to a number of States.
The Honourable Minister further informed Council that the balance in the SF now stands at N25,793,400,290.00