Nigerian govt gives condition for tax amnesty for undeclared offshore assets

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The Federal Government has declared tax pardon to owners of offshore assets that are willing to voluntarily declare them.

This was disclosed on Tuesday by the Attorney General of the Federation and Minister of Justice, Mr. Abubakar Malami (SAN) during the unveiling ceremony of the Voluntary Offshore Assets Regularization Scheme (VOARS) in Abuja.

Malami explained that the VOARS, just like the Voluntary Assets and Income Declaration Scheme (VAIDS), was to provide an opportunity for taxpayers or amnesty for tax defaulters to voluntary declare their offshore assets and income from sources outside Nigeria relating to the preceding thirty (30) years of assessment.

He listed benefits therein for defaulters to include, “Permanent waiver of criminal prosecution for tax offences and offences related to the offshore assets, penalties and interests concerning such declared offshore assets; Immunity from tax audit of the declared and regularized offshore assets; waiver of interest and penalties on the declared and regularized offshore assets.’’

He added that defaulters would receive an Offshore Assets Regularization Compliance Certificate on assets declared and regularized, including assets outside the country.

By this, he noted that defaulters who comply would ‘’be free to use or invest their duly regularized residual offshore assets in any manner in Nigeria or overseas, and be subject only to annual tax to Federal Government of Nigeria on the income earned on such residual offshore assets”.

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He said, ”Please note further that when Funds are voluntarily declared by the owners, the Federal Government of Nigeria will deduce thirty-five percent (35%) recoveries while two and half percent (2 1/2%) will be charged as administrative fees for purpose of assessing the funds while sixty-three percent (63%) will be registered in the system to become taxable in Nigeria.

“The Infrastructure Fund will serve as a proposed investment facility, where the Federal Government of Nigeria will have minimal investment, with the matching investments from banks and prospective international investors as well as Nigerians, holders of the sixty-three percent (63%) who are expected to invest into this fund with the view of financing Nigerians infrastructure and bridging the deficient all attracting Foreign Direct Investment.’’

He explained that the scheme, which is an initiative of the Swiss Consortium, was inspired by the signing of Executive Order 8 on the Voluntary Offshore Assets Regularization Scheme by President Muhammadu Buhari in October, 2018.

The fund would be provided by third party which include banks, estate managers, auditors, accountants, amongst others, adding that his office is collaborating with the Ministry of Finance, Accountant General of the Federation, the Federal Inland Revenue Service, Infrastructure Concession Regulatory Commission, Nigeria Intelligence Agency, Nigeria Sovereign Investment Authority, Central Bank of Nigeria and Debt Management Ofiice, all of whom would develop a road map for implementation of the Executive Order 8, as well as mechanism for taxation on Funds to be declared by Nigerians as offshore assets.

By Babatunde Alao…

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