Presentation by Lawan Bello at the second annual Nigerian Tax Research Network meeting which took place in Abuja on 24th and 25th November 2018.

1. Compliance Impact of
Voluntary Assets and Income
Declaration Scheme (VAIDS) in
Kano Nigeria
Lawan Bello ACTI
North-West Regional Debt Management Unit
(NWRDMO)
Federal Inland Revenue Service
NTRN Second Annual Meeting 24-25 October,
2018

2. What is VAIDS
• VAIDS stands for Voluntary Assets and Income Declaration
Scheme
• It’s a Federal Government tax compliance program which
provide opportunity for taxpayers who are in default under
all relevant statutes to voluntarily declare their Assets and
Income and pay taxes due on them and in return obtain some
benefits
• Its also an avenue of inculcating in all citizens, the ethic of
responsibility to the nation, accountability and honesty
through voluntary reporting of tax base, correct computation
of tax liability in the required format and payment of tax due

3. Objective of the Scheme
• Increase tax to GDP ratio from the current 6%
to 15%
• Discourage illicit financial flows and tax
evasion
• Broaden the national tax base
• Curb non-compliance with existing tax laws

4. Legal Basis for the Scheme
• The legal basis for VAIDS is the Executive
Order No 4 of 2017 signed by the acting
President which commenced on 1st July 2017
and ended 30th June 2018, all persons and
entities that are in default are expected to
declare their assets and income from sources
within and outside Nigeria relating to the
preceding six (6) years of assessment

5. Benefits of the Scheme
The scheme has provided benefits and reliefs for every taxpayer
who truthfully and voluntarily declare his income and assets
these are
• Immunity from prosecution for tax offences
• Immunity from tax audit
• Waiver of penalty
• Waiver of Interest and
• Option of spreading payment of outstanding tax liabilities
over a maximum period of three years as may be agreed with
relevant tax authority

6. Consequences of Non-compliance
with the Scheme
As stipulated in the VAIDS executive Order, any defaulting taxpayer who fail to
truthfully and promptly take advantage of the scheme shall at expiration of
the scheme be liable to the following consequences
• Liability to pay in full, the principal sum due;
• Liability to pay all interest and penalties arising therefrom
• Liability to be prosecuted in accordance with relevant extant laws for tax
offences
• Withdrawal of any reliefs, which may have been granted to the
participant;
• Liability to undergo a comprehensive tax audit; and
• Any sum paid in relation to the scheme may be counted as part payment
of any outstanding tax in respect of undisclosed information.

7. VAIDS Compliance in Kano, Nigeria
Like any other state government in Nigeria, Kano
state has witness a proactive VAIDS campaign
and a series of training workshop organized by
the state and Federal government, and to some
extend the exercise has increased
• Tax base
• Taxpayer awareness and
• Tax revenue

8. VAIDS Compliance Impact
Information available at Federal Inland Revenue
service and that of State board of Internal
Revenue in Kano reveal that number of VAIDS
returns filed is less than 0.3% of total number of
registered cases
• Does that mean more than 99% have no
undeclared income and or assets???

9. Potential reasons for Non-
Compliance
• Equity
– Is the taxpayer treated fairly?
– Does the government make good use of the tax revenue
• Opportunity for non-compliance
– Cash based businesses
– Large Informal Sector businesses
• Poor tax administration
– Uneasy compliance strategy
– Unprofessional conduct of tax officials
• Social norms
– Everybody does it …..
– No body sent to jail for tax evasion
• Political reasons

10. The link to improving compliance
Government
• Political will
• Accountability and transparency
in the use of public funds
• More social services
• Ease of doing business
Taxpayers
• Honesty
•Trust
Tax Authority
• Professional
service delivery
• Application of
modern technology
Tax Compliance

11. Quality
ofLife
StandardofLiving
Work
Housing
Recreation/
Sport
Safety and
Security
Pension
funds
Infrastructure Education
Health
HUMAN
NEEDS
Transport Welfare
The link to improving compliance
Make our taxpayers understand why tax compliance is necessary
Understanding the needs and reasons of taxation

12. The link to improving compliance
Continuous Design and Implementation of Tax compliance program
• Using data and business intelligence to build
compliance improvement plans
• Understanding taxpayer behavior
• Employing the right people
• Exploring new ways of work

13. The link to improving compliance
Making taxpayers aware of Tax Authority plans and results
• Communication of the plan is key
• You must act according to the plan
• Deliver what you said you would and communicate
it – fraud identified , imprisonment etc.

14. The link to improving compliance
Continues Evaluation
Evaluating compliance trends is difficult, but ….
what gets measured gets done!
Input Activities Output Outcomes

15. Remember: The ultimate goal is
not to find non-compliance, it is to
prevent non-compliance

16. Thank you for listening.