This was revealed on Sunday by Finance Minister, Mrs Kemi Adeosun, in an article she circulated among media houses.
According to the minister in the article with the title All change! Nigeria is not an oil economy, “Over 800,000 companies, including some government contractors that have never paid taxes have already been identified and are being audited.”
Mrs Adeosun added that her ministry had commenced “a database project that combines data from the various arms of government, including bank records, property and company ownership, and Customs records to create accurate profiles of those liable to pay taxes. The ministry has also placed one of the world’s premier private investigation agencies on retainership to trace overseas assets.”
Adeosun, who argued that Nigeria is not an oil economy in the sense that Saudi Arabia, United Qatar and Kuwait are, stressed that revenue mobilisation is the key to unlocking Nigeria’s huge growth potential.
According to her, “A cursory look at the effective tax rates paid by the huge multinational and local operators, as well as the data on illicit financial flows, indicates a pattern of systematic tax evasion at all levels. Recent statistics released by the Federal Ministry of Finance showed that Nigeria has just 14 million active tax payers from an economically active base of 70 million. Over 95 per cent of these are salary earners in the formal sector, just 241 persons paid personal income taxes of N20m (US$65,573.77) in 2016.
“Taxing the high net-worth and Nigeria’s huge community of entrepreneurs constitutes a critical but yet attainable target. The statistics for corporate tax payment shows the debilitating effects of base erosion and profit shifting as well as abuse of an overly generous tax incentive and duty waiver system. The historical government apathy towards revenue mobilisation is one of the effects of the mistaken identity that saw Nigeria perceive itself as an oil economy. This administration is determined to correct this identity crisis and all its concomitant effects.”
The minister also said a nine-month tax amnesty window was opened through the Voluntary Asset and Income Declaration Scheme (VAIDS) to allow both organisations and individuals to regularise their tax status in exchange for a guarantee of freedom from penalties and further investigation.
In her words, “This amnesty follows successful initiatives in a number of countries, where tax evasion is a problem, such as Indonesia, Argentina, South Africa and India. It has been programmed to end just as the Automatic Exchange of Information, which will provide Nigerian tax authorities with unprecedented levels of information on offshore assets, becomes effective.
“The initial signs suggest that Nigerians are responding positively to the new revenue narrative. Despite the emergence from a recession, tax revenues are showing early signs of growth. VAT shows 18.97 per cent year on year improvement.”
According to the minister, who pointed out that oil economies are usually characterised by low population
and then