VAIDS, for an improved IGR - The Hope Newspapers
 

VAIDS, for an improved IGR

Admin 04 Oct, 2017 Business

By Fatima Muraina
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The importance of Internally Generated Revenue (IGR) in any developing country cannot be over-emphasised. This became necessary following the current trend in Nigeria as its oil can no longer be depended upon to boost the nation’s economy but rather for the country to look inwards to diversify its economy for better revenue generation.

This, however, brought about the idea of Voluntary Asset and Income declaration Scheme (VAIDS) in tax arena introduced by the federal government on June 29th, 2017 and began implementation on July 1st, 2017 with the aim of assisting the states to boost the IGR.

The scheme, introduced in the taxing system has a duration of nine months validity period when all the tax payers are expected to have declared their assets and income voluntarily.

The Ondo State Board of Internal Revenue (BIR) recently introduced the scheme to the Accountants who are regarded as the major players in revenue generation so that they could reciprocate same to their various clients across the state.

At the meeting, they were urged to bring in their professional practice in helping their various clients understand the concept for the development of the state through sensitizing them on the new scheme, its relevance and applicability to the people and the state in general.

The Acting Chairman of the state BIR, Mr. Bunmi Alade, who spoke to The Hope on the scheme explained that VAIDS is an avenue for tax payers to declare their income  correctly if they have not being declaring it. Where they have tax backlog that are supposed to be paid, they will be allowed to make a plan on how to make payment that is due from them.

“Those backlog will be calculated and payment could be spread for about three years from the time of agreement, whatever amount that is outstanding as per their tax liability.”

This, he explained would not attract any interest or penalty because they have declared voluntarily but where such declaration was not made, the payer would be penalised and charged to pay interest and be made to face the tax law.

According to Alade, tax payers are expected to file in their returns and whatever they want to disclose.

He said they have to meet the Board of tax authorities to compute  what they have to start paying.

VAIDS, he noted is expected to lead people to be compliant with tax payment to help increase the tax DP ratio from what it is at present.

Alade said “The tax law is there for tax defaulters but what we are saying is that people are supposed to leverage on VAIDS to do the needful. If par-adventure they still not paying the right thing, the board will have to go and prosecute them for non-payment “.

In a paper Alade  presented at the interactive session with the Association of Chartered Accountants in Practice in Ondo State, he described  VAIDS as a shift towards voluntary tax compliance which implies government’s ability and will to track and prosecute tax evaders.

He outlined various advantages of the scheme to include reduction of tax payers burden, significant revenue generation within a short period, widening of tax base, curbing evasion, increased tax awareness campaign and tax culture, strengthen tax administration and combating illicit capital tight.

It will also lessen the burden of compliance monitoring and prosecution, increase public engagement accountability, indication to evaders that time is running out and generation of useful data and records.

However, its disadvantages is interpreted by some as sign of weakness on the part of government and encouraging defaulters, inequity, unfair to law-abiding tax payers, avoidance revenue leakage where tax payers already within the tax not and able to participate and the long time costs may outweigh the short terms revenue benefits.

There is difficulty or impossibility of tracking and bringing all defaulters to book advertised, especially politicians and politically exposed, limited participation in expectation of future amnesty and hardened tax evaders may decide to test the will of government and take advantage of all the technical loopholes as well as may not ultimately improve the behaviour of tax payers.

Advising the people on the need to key into the new scheme, the state Chairman of the Association of Chartered Accountants in Practice in Ondo State, Mr. Idowu Otetubi opined that it will help government to achieve its expected goal of delivering dividends of democracy to the people through a robust IGR.

This, he said is the only way government can actualise its responsibility to those that voted them to into power.

He charged Ondo State people to wake up to their responsibilities saying that tax payment is mandatory for any adult above 18years except such a person is unemployed or a student.

“Taxation is a question of law not a negotiation or what do I want to do. For a citizen to be law abiding, he must pay tax”, he declared.

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