VAIDS implementation: FG to provide training for professionals
To support the successful implementation of the recently-launched Voluntary Asset and Income Declaration Scheme (VAIDS), the Federal Government has committed to providing free training to accountants, lawyers, wealth managers, stockbrokers and other professional advisers to the public on the scheme. The free training is aimed at equipping them to give advice to their clients on participating in the scheme.
In a message to the Conference of the Chartered Institute of Stockbrokers held at the Trasncorps Hilton Hotel in Abuja on July 4, 2017, Minister of Finance, Mrs Kemi Adeosun said that professional advisers were critical to the success of the VAIDS scheme due to their role in financial management. The theme of her message was “Transiting from Recession to a Global Economic Power.”
“Those who manage wealth and undertake transactions on behalf of their clients are best placed to advise them to take advantage of the VAIDS offer by declaring their assets and income honestly” she said and enjoined Stockbrokers to join hands with the Federal Government in improving tax-payer education and compliance, crediting their side customer network as a key advantage.
She specifically commended Stockbrokers for their role in the recently launched Federal Government Savings Bonds, which relied on their distribution network. “The success of this product shows that you continue to have a wide reach and therefore must partner with Government,” the Minister noted.
She also commended the role of the stock brokers in the recent successful Eurobond and Diaspora Bond issuances, adding that despite these debt issuances, Government is focussed on changing its financing mix and on raising more revenue.
Mrs Adeosun affirmed that Nigeria is on the road to recovery and emphasised the role of investments in infrastructure to enhance productivity and competitiveness.
Citing the N1.2Trillion already released for capital projects under the 2016 budget, Mrs Adeosun assured that much more could be done if every citizen paid the correct taxes. “It would be like thinking the unthinkable; it is time that Nigerians said Nigeria First.”
ADEOSUN: TECHNOLOGY WILL ENHANCE TAX COMPLIANCE
The Federal Government will deploy and heavily rely on technology to increase tax compliance under the recently launched Voluntary Asset and Income Declaration Scheme (VAIDS). Minister of Finance, Mrs. Kemi Adeosun has said.
In an interview on Channels Television, the Minister explained that the signing of an Executive Order by the Acting President, Professor Yemi Osinbajo on Assets Declaration, underlines the seriousness attached to the scheme, which would be vigorously implemented.
The Minister stated that at 6%, Nigeria’s tax compliance rate was low whilst most developed nations were at 30-32%. "Prosperous nations have high levels of tax compliance whilst poor nations have low rates. Nigeria aspires to be a prosperous nation, so this problem must be solved."
The Minister revealed that the Government had deployed data mining to compile data on thousands of tax payers, which showed the level of non-compliance and tax evasion. Citing BVN, land registry and other sources within Nigeria as well as data from foreign Governments. She also detailed the work of an international asset tracing firm as a source of overseas data. “Technology has been key in enabling us to build an accurate financial profile for Nigerians and based on the information we gathered, we saw that the level of non-compliance was very high and we knew we had to do something about it. In the past, tracking true income and assets would have been difficult but now, it is at the touch of a button”.
The Minister revealed that further information would automatically become available in 2018 under the Automatic Exchange of Information, to which Nigeria is a party. Nigeria will automatically get information through tax authorities of various countries.
“What VAIDS is doing is giving tax payers, both companies and individuals, a window of opportunity to regularise, to come clean so to speak, to declare fully, to declare honestly. In exchange for full and honest declaration, what we are assuring is that we will waive penalties that should have been levied, waive the interest that should have been paid on overdue tax which is quite considerable, those who declare honestly will not be subject to any investigation or tax audit” she explained.
She added that the scheme is also to help increase tax awareness and education. The Community Tax Liaison Officers, who are graduates recruited through the N-Power programme, would go into their communities, schools and other public places to raise awareness and help increase tax enrolment. We are recruiting a total of 7,500 CTLOs through this scheme.
The Minister gave details of the ‘Tax Thursdays’ programme which will operate for the next one year, as announced by the Acting President and would see tax awareness activities at State and Federal Government level to improve tax education and increase the number of tax payers from the current 14 million out of 69.5 million who are economically active.
The Minister gave assurances of the judicious use of funds, saying that "tax payment is part of the civic partnership between people and Government which would enhance participation and accountability."
On the confidentiality of information generated on individuals, she assured that “all information collected would be treated as strictly confidential and our doors are open. We understand that some people have significant declarations and people can walk in to speak with me. We have already started receiving enquiries.”
WORLD BANK TO ASSIST NIGERIA TO STRENGTHEN AND CONSOLIDATE FSP
The World Bank Group is set to assist Nigeria’s State Governments improve their fiscal sustainability by strengthening and consolidating the Fiscal Sustainability Plan (FSP). The FSP was introduced by Federal Government in 2016 as part of the measures to tackle the 2015-2016 fiscal crisis that followed the decline in revenue and budget cuts leading to two financial bailouts for the States by the Federal Government.
The Plan is also an instrument for reforming the whole gamut of the Public Sector Financial Management (PSFM) system spanning the three tiers of government.
The 22-point FSP was acceded to by the State Governments in 2016 to implement fundamental reforms by taking measures including instilling a regime of fiscal transparency and accountability, improving Internally Generated Revenue (IGR), the taming of unnecessary recurrent expenditure and strengthening adherence to debt management guidelines by the States.
The proposed intervention by the World Bank would involve financing capacity building and providing technical support for officials in the 36 States of the Federation by equipping them with the requisite knowledge and skills to effectively manage the comprehensive implementation of the components of the FSP on a sustainable basis.
The objective was to ensure that the States were put on the path that would lead them out of the situation in which they have to be bailed out or fail to meet their financial obligations for the wellbeing of the citizenry.
The capacity building programme would also include imparting skills that would contribute in the successful implementation of the Open Government Partnership commitments with the view to boosting the fiscal transparency and accountability component of the Fiscal Sustainability Plan.
PROJECT ACT NOLLYWOOD – INNOVATIVE DISTRIBUTION FUND (IDF) DISBURSEMENT
The objective is to:
(i)Sustain the growth of Nigeria’s movie Industry,
(ii)Encourage the Industry realize its potential of being a significant creator of employment and considerable contributor to GDP
(iii)Address some of the key challenges currently facing the Industry.
The programme aims to improve and promote key components of the value chain through the provision of grants scheme designed to support existing or aspiring practitioners within the Industry, including the Diaspora.
Project ACT-Nollywood has 3 primary components aimed at developing and addressing inhibitors to further growth, which exist along the movie making value chain. The components are as follows:-
i.Film Production Fund (FPF)
ii.Capacity Building Fund (CBF)
iii.Innovative Distribution Fund (IDF)
The (FPF) and (CBF) have been fully implemented while the (IDF) which is the third component of the project is on-going. The (IDF) covers online, National, Regional and community categories of Nollywood Film distribution and exhibition. The objectives of IDF are to:
i.Improve the distribution network of Nigerian Audio-Visual contents.
ii.Cut down on piracy
iii.Create jobs (direct and indirect)
iv.Better protect Intellectual Property Rights (IPR) within the Nigerian Entertainment Industry.
A total sum of N1.8 billion was approved for disbursement to 106 beneficiaries in this component. N1.335 billion has earlier on the year been disbursed as first tranche to 105 beneficiaries.
During the Monitoring and Evaluation (M & E) of this first tranche disbursement, the Project Implementation Unit (PIU) recorded a number of achievements in line with the objectives of the programme as follows:
i.15 community cinemas and viewing centers have been established through the grant and this has improved the distribution network of movies in Nigeria.
ii.The programme has supported 18 firms in strengthening online distribution platforms. This has helped curbed illegal downloads and piracy.
iii.256 permanent jobs and 544 temporary jobs have been created through the financial support provided to 105 beneficiaries by the programme.
iv.The programme has equally aided the extension of the Nollywood Industry to sub-Sahara Africa through the funding of National distributors to expand their distribution capacity and network. National distributors are expanding their capacity to lip-synching their content in French for onward distribution to the ECOWAS sub-region.
Consequent upon the above, the Honourable Minister has approved the disbursement of the balance sum of N420,200,000.00 to 105 IDF beneficiaries in the 2nd/final tranche.
FG: REVENUE MOBILISATION IS CRITICAL TO OUR SUCCESS
While delivering the keynote address at the NSE-BLOOMBERG CEO Round Table in Lagos on Friday, the Minister of Finance, Mrs. Kemi Adeosun, said that revenue mobilisation is critical to the success of Nigeria’s economic reform agenda.
She said: “For the size of our Government, the size of our economy and the size of our needs, Government revenue is simply just too low”. We see increasing revenue as the long-term strategic solution for sustainable and inclusive growth. Revenue is required in the short-term for investments and in the medium to long-term for our debt service.
Our acceptance that our ambitions cannot be financed by oil revenue is an equal acceptance that there is a finite limit to how much can, and should be financed by debt. If we don’t want to borrow, we need more revenue.
The problem is not that our debt service is too high but our revenue is too low and the manner in which the imbalance between our debt service and revenue will be corrected, apart from rebalancing our borrowings in favour of longer tenure loans and external sources, is by finally and frontally facing the issue of revenue.
In her speech, she emphasised the limitation of relying on oil “We believe that Nigeria is an ‘oil-plus’ economy and we should model ourselves after countries that have similar profiles like Egypt with a population of 91 Million and 490,000 barrels of oil per day (185 people to a barrel of oil) and has a highly diversified revenue base.
She further explained that we cannot model ourselves after Saudi Arabia, with their 30 Million population and 10 Million barrels of oil per day (3 people to a barrel of oil). In Nigeria, we have a population of close to 180 Million people and about 2 Million barrels of oil per day (90 people to a barrel of oil). We must therefore, diversify our revenue base.
Adeosun stated that revenue mobilisation, is therefore, critical to our success. “Revenue mobilisation is critical to the success of Nigeria’s economic reform agenda and we are working on strategies to drive non-oil revenue growth, she said”. To do this, we must amend Nigeria’s low level of tax compliance. A tax to GDP ratio of just 6%, is just too low and we are working to amend this.
It could be recalled that on Thursday the Ministry of Finance, announced plans to recruit and train 7,500 Community Tax Liaison Officers under the N-Power scheme. “These young people will be subjected to a rigorous and intensive education on the tax system, sales, communication skills and civic education before being deployed to their communities to provide tax education and enrol new tax payers”, she said. We have just 14 Million tax payers out of an estimated 69.9 Million people who are economically active.
Nigeria is doing more with less and we will continue to do so. Growth is returning, investor confidence is reawakening and that confidence is based on an economic blueprint, which if followed doggedly, would take us from the rough road, onto a path of sustainable and inclusive growth.
Other speakers at the Round Table included Dr. Doyin Salami of Lagos Business School, Mr. Andrew Alli, the President/Chief Executive Officer, Africa Finance Corporation and Mr. Oscar Onyema, the Chief Executive Officer, Nigerian Stock Exchange, among others.