Nigeria to Tax Illicit Money Under New Tax Bill
The Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele has said that illicit funds in Nigeria such as laundered money or proceeds of crimes will also be taxed under the controversial tax reform bill.
Oyedele made the assertion when speaking on an X space hosted by Nairametrics in partnership with Business Day, BudgIT, and CODE.
He explained that the government will rely on data and intelligence reports to track illicit funds of Nigerians and tax them before probing the sources of such funds.
He said such tax will be collected through what he tagged a “voluntary disclosure programme”, in which people will declare the source of their funds whether legal or illegal.
“Yes, we have provisions (for illicit funds) in those bills. You have to pay tax regardless of the source of the income, and once we find that you have revenue, including from the international data we’re going to be receiving, and you can’t explain it, you have to pay the tax.
“But for people to be able to do that almost seamlessly, we plan to do a voluntary disclosure programme, where we give the people the opportunity to self-declare before we now come down on them because this time around there is going to be data and everybody will know it is not a joke,” he clarified.
Govt will discover revenue through intelligence
Oyedele further explained that the government will find out the revenue of citizens whether a citizen discloses or not.
“We are going to write you and tell you, “This is how much you have in your account”, the number of bank accounts that you have; how much money you spend on your payment card; the money you have with investment accounts and asset management, stock accounts, how many times you have travelled abroad.
“I don’t want to scare anybody but these are pieces of cake that they have been doing in small, large, developed, underdeveloped countries for years. So we are not even doing anything that is novel, we are just trying to be at par with the rest of the world.”
It will help fight corruption
Oyedele also noted that expanding the tax net to the underworld of crimes will help Nigeria fight corruption.
He said: “We think this will also help us to fight corruption because if we want to do this seriously, this is how to tackle corruption.
“Because I find money that you can’t explain, then I collect the tax fast, then I come back to say “by the way, where did you get the money from?”
He added that the bill makes provision for an Ombudsman to ensure that taxpayers are not cheated and overtaxed. He said the Ombudsman would be legally empowered to function
“The Ombudsman can also bite. And it is not just about protecting the vulnerable person, you come in and just vent. The Ombudsman has the means and resources to intervene immediately. And there are consequences for the revenue authority if they don’t listen to you, including legally.”
What you should know
- The tax bill provides relief for low-income earners and small businesses as they would be exempt from income taxes and value-added taxes.
- However, it is facing strong resistance from the Northern part of the country, where political stakeholders say it would not benefit the region.
- Virtually all governors in the Northern region have opposed the bill.
