Remember VAIDS? You most probably do. But not many Nigerians can still off-handedly volunteer its full meaning. Nor are there more than a few who can readily recall its main essence.
In any case, the acronym still stands for Voluntary Assets and Income Declaration Scheme. It was invented via presidential Executive Order No. 4 of June 29, 2017 which took effect from July 1, 2017. The scheme was originally intended to terminate after nine months on March 31, 2018 but was later extended by three months to June 30, 2018. According to the authorities, this followed appeals by professional tax bodies and individual tax defaulters for a shift of the timeline and also coupled with an early sign that the initiative held the promise of a bountiful reward.
VAIDS was introduced to give tax payers the opportunity to regularise their tax status, especially for the period between 2011 and 2016, in return for a waiver of any penalty like accumulated interest charges, investigation and criminal prosecution. Its main objective was to widen the nation’s tax net while also raising her abysmally low rate of Tax to Gross Domestic Products (GDP).
Indeed, with a Tax-to-GDP ratio of 6%, Nigeria was said to have ranked as the lowest tax-collector nation not only in Africa, but the world. The ratio now stands at 9%, still short of the 15% approved as the sustainable figure for any economy by the UN-backed Organisation for Economic Cooperation and Development (OECD).
Just as Nigeria’s overdependence on crude oil resulted to the relegation of agriculture as a major export revenue earner, so also did she play down on taxation as a traditional revenue generating source; hence, tax avoidance, evasion and covert off-shore lodgments of taxable earnings soon became the new order.
The VAIDS tax amnesty was launched as part of a series of reforms introduced under the federal government’s Economic Recovery and Growth Plan (ERGP).
Former Chairman of the Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler, had said that the government planned to realise N305 billion from its VAIDS programme. He said that the scheme was being used to correct the abnormal situation where only 14 million Nigerians were tax compliant in a country of 70 million economically active citizens.
So far, there seems to be indications that the scheme’s total take-back will surpass its expectation. For instance, in the one year of VAIDS’ existence, President Muhammadu Buhari confirmed that the federal government received 5,122 applications with N92.62 billion tax liability. Out of this figure, N34.67 billion had been paid while N57.95 billion was to be settled in installments.
Buhari spoke through the Permanent Secretary, Federal Ministry of Finance, Budget and National Planning, Mahmood Isa-Dutse, while addressing the 21st Annual Conference of the Chartered Institute of Taxation of Nigeria (CITN).
Also speaking on the essence of VAIDS, early last year, the Finance Minister, Mrs. Zainab Ahmed, had said that “Data from the VAIDS Tax Amnesty programme has since generated over N70 billion in terms of tax revenue in unpaid taxes and significantly increased the quantum of previously undeclared, but taxable assets.
“Project Lighthouse continues to illuminate the grey areas where non-compliant tax payers reside.”
She was reported to have further disclosed that the newly established Tax Appeal Tribunals (TATs) had identified new cases of tax default while recording 78 new appeals with disputed value of N73.3 billion and $19.5 billion. The appeal tribunals, she said, have resolved over 67 appeals with a disputed tax value of over N328.8 billion and $6.6 billion.
For the one year that VAIDS lasted, and going by all the declarations made so far, it would be safe to assert that the exercise was worth the attempt, after all. However, I am a little discomfited by the amnesty having to include tax defaulters who failed to remit deductions made from contractors, employees, taxable goods and other sources in the form of withholding taxes. Much as they, like others, were eligible to benefit from the amnesty on the basis of their own individual tax status regularisation, but certainly not for belatedly remitting to the state tax sums which they had previously deducted from a third party and probably ploughed back into their businesses. Surely, they deserve to suffer some penalty for this.
It is now three years since the amnesty window was shut against unrepentant tax defaulters. It would be fair to state that while the government has been singing VAIDS’ success story in terms of accruals from fresh assets and income declarations, Nigerians also expect news on busted celebrity tax dodgers and high-profile racketeers. We cannot pretend that they do not exist. Or is Mrs. Ahmed’s Project Lighthouse not throwing its beam in the right places?
Again, only judicious application of whatever is recovered from VAIDS can serve to encourage future voluntary and timely compliance with tax payment. Corruption and lopsided development would need to be hauled overboard for there to be sustained tax remittance culture in Nigeria.
Honestly, with talks of the suspected non-remittance of multibillion naira value-added tax (VAT) by the Nigerian Ports Authority (NPA), other agencies like NNPC, NDDC, FIRS and even some oil and gas multinationals have become suspects. This has also created a lot of scepticism on the effectiveness of the Treasury Single Account (TSA) policy of the federal government.
As for the NNPC, there is the urgent need to apply measures that are even beyond the nature and scope of VAIDS to attempt a recovery or, at least, a halt of the suspected revenue haemorrhage in the state oil and gas behemoth.

By: Ibelema Jumbo