[EDITORIAL] Buhari, go tough on wealthy tax evaders
A fresh amendment to a legal mechanism against offshore tax evasion could serve as the bold impetus the Federal Government requires to expand its flagging revenue profile. To accomplish this objective, the President, Major General Muhammadu Buhari , has resuscitated the Voluntary Overseas Assets Regulatory Scheme.
Interestingly, a few months after the amnesty period for offshore assets owners to regularise their possessions expired, the Buhari regime just came out with the amendments. This might imply that not much was achieved in the enforcement of the VOARS, which was spearheaded by the Ministry of Justice. It dampened the regime’s anti-corruption image. Moreover, as Nigeria had just emerged from a recession, the tax collected from VOARS would have given the economy a significant momentum.
Tax evaders use byzantine network of shell corporations and secret offshore bank accounts. Some major Western consulting and accounting firms assist wealthy tax evaders in poor countries. The IMF says a typical developing economy collects just 15 per cent of GDP in taxes, compared with the 40 per cent collected by a typical advanced economy. In the WB’s ease of paying taxes 2017, Nigeria was in the 182nd position out of 190 countries; South Africa made No. 51 out of 190 in the same category.
The tax system relies on voluntary compliance. The bad news is that the overwhelming majority of wealthy Nigerians are dishonest and unpatriotic. Policymakers should review the process of paying taxes, making taxation simple through digitisation and elimination of multiple payments a top priority.
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