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With a tax amnesty scheme, taxpayers are given an opportunity to regularise their tax affairs with relevant tax authorities, by self-declaring previously unpaid/underpaid taxes. .Nigeria does not have a dedicated Amnesty programme. However, the Federal Government of Nigeria recognises the impact of Amnesty.
Moreover, amnesty is legal forgiveness from certain infractions. Tax amnesty therefore constitutes a form of waiver or reduction, removal of penalties in back taxes to encourage defaulters. Inspite of the National Tax Policy, amending the tax laws and strengthening of the Federal Inland Revenue Service (FIRS) for enhanced operational efficiency, no real consideration has been given to measures or strategies that may encourage voluntary declaration and compliance as an alternative means of growing the nation's tax base.
Nigeria launched a tax amnesty scheme in June 2017. Designed to last for nine months, the Voluntary Assets and Income Declaration Scheme (Vaids) was subsequently extended to 12 months, and sought to encourage the voluntary disclosure of previously undisclosed assets and income for all outstanding tax liabilities.
The primary aim of Vaids was to widen the tax net, thus raising much needed tax revenue now and in the future. Disappointingly, though, the revenue collected fell far short of the US$1bn target. Liabilities of only US$268.3m were declared, and payments received amounted to just US$103.3m, leaving US$165m outstanding.
In October 2018, Nigeria introduced another tax amnesty – the Voluntary Offshore Assets Regularization Scheme (Voars) – for a 12-month period. The main purpose is to give taxpayers with offshore assets the opportunity to declare them for tax purposes regardless of the legitimacy of the source. The scheme is still ongoing, so it is not possible to assess performance against expectation.
Consequently, there are a lot of challenges that post threat to Tax Amnesty in Nigeria. Here are :
1. Implementation challenges
2. Low tax morale
3. No credible threat of post - Amnesty crackdown
4. Tone from the top .
If the state works to exempt taxpayers by reducing red tape, it will reduce tax evasion and increase compliance
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