The Federal Government has announced that it will massively deploy technology and rely heavily on it henceforth in the pursuit of increased tax compliance and expansion of revenue base.
The Minister for Finance, Mrs. Kemi Adeosun, who made the announcement in a monitored programme on TV yesterday, vowed that the country would engage in several strategies to ensure that elites and other eligible taxpayers with assets in and out of the country do their civic duty.
Adeosun explained that the signing of an Executive Order on Assets Declaration by the Acting President, Prof. Yemi Osinbajo, underlines the seriousness attached to the scheme, which would be vigorously implemented.
Lamenting that at six per cent, Nigeria’s tax compliance rate was low, while most developed nations were at 30-32 percent, she said: “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.”
According to her, the government had already deployed data mining to compile a list of thousands of taxpayers, which showed that the level of non-compliance and tax evasion is huge. Citing Bank Verification Number, land registry and other sources within Nigeria, as well as data from foreign governments, she also listed 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,” she said.
The minister’s declaration came on the heels of three related events having to do with legal framework, voluntary asset declaration and invitation from a group of international asset tracers to Nigeria, which ran simultaneously.
While the Acting President, Yemi Osinbajo, signed an Executive Order on Assets Declaration, followed by the launch of Voluntary Asset and Income Declaration Scheme (VAIDS), the Global Forum on Transparency and Exchange of Information for tax purposes told Nigeria it would open information on assets that belong to its citizens abroad, which are hidden from tax and governmental authorities.
But as part of the pre-conditions, Nigeria would have strong information technology system and support within the tax administrations to ensure that information received will be used properly and the confidentiality assurance.