THE Nigeria government and some foreign countries, including the United Kingdom (UK), have commenced the Automatic Exchange of Tax Information (AETI), particularly on overseas assets owned by Nigerians.
Minister of Finance, Kemi Adeosun, said this yesterday in Abuja during the presentation of Progress Report on Tax Laws Reform by the Vice Chairman of the National Tax Policy Implementation Committee, Taiwo Oyedele.
The committee, set up last year, had recommended the reduction of the Small and Medium Enterprises (SMEs) Companies Income Tax rate from 20 per cent to 15 per cent.
It also reccommended the enactment of two executive orders, as part of measures to widen the country’s tax net and raise its taxes to Gross Domestic Product (GDP) from its six per cent to a higher level.
The committee was, however, silent on the country’s value added tax (VAT) rate but recommended for its law to be reviewed for ease of collection and transparency.
Adeosun expressed satisfaction with the data being supplied to the country by foreign countries under the AETI, to which the country became a party in January 2018.
“The data received in Nigeria with regard to overseas assets held by Nigerians has been impressive and will underpin a long-term improvement in the nation’s tax to GDP ration will, in turn, improve the peoples livelihoods.
“The data on bank accounts, property and trusts, which has come automatically from a number of countries is being used to support the Voluntary Assets and Income Declaration Scheme (VAIDS) by allowing the tax authorities to check the accuracy of the declarations received.
“The Federal Government is also using the data to generate ‘nudge’ letters, which are being sent to those identified, as being potential tax defaulters,” she said, while responding to questions during the submission of progress report on tax laws reform.
She disclosed that Nigeria had written to several countries to request for specific information about offshore trusts and bank accounts held by its citizens.
Adeosun advised users of offshore structures to take advantage of the VAIDS to regularise their taxes before the expiration of the Presidential Amnesty Programme.
“The offshore tax shelter system is basically over. Those who have hidden money overseas are being exposed and while Nigerians can legally keep their money anywhere in the world, they must first pay any taxes due to the government so that we can fund the needs of the masses and create jobs and wealth for our people.
“The moral argument against illicit financial flows and tax evasion and the strong international co-operation are such that every Nigerian tax payers should do the right thing. The needs of our people for development override any other argument against payment of taxes,” she stated.