5 Things Small Business Owners Must Know About Govt’s Tax Amnesty
Perhaps you own a small business and have not been paying any taxes because you think the federal government is only interested in big businesses.
You are mistaken. Tunde Fowler is interested in every tax penny, no matter where it is coming from.
Now, there is this thing called Voluntary Asset and Income Declaration Scheme, VAIDS that the Federal Inland Revenue Service has been talking about since last year.
So, what is VAIDS? Well, we will not bore you with all those jargons. VAIDS simply means tax amnesty.
It is a way of government saying: “We know you have not been paying your tax; we know you may not even have registered or know how to go about it; or you have been tempted to pay a small portion of the tax and ‘chop’ the remaining larger portion.
Also Read: How To Obtain Your Tax Identification Number
“Your sins are forgiven, but you must come and tell us the truth about how much you earn, what assets you own, before March 31, 2018. After March 31, you are a potential criminal.”
So that’s VAIDS in a nutshell.
As a small business owner, here are 5 things you need to know:
1. VAIDS Cover All Types of Taxes: The tax amnesty scheme covers all types of taxes. It covers all Federal and State taxes such as Value Added tax, Companies Income Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duties, Tertiary Education Tax.
As far as your small business is concerned, the federal government may just be interested in your VAT remittance.
2. Everyone Is Entitled To Participate in VAIDS: The Scheme covers all taxable persons and entities including individuals, trusts, executors, registered companies and statutory companies.
VAIDS is therefore open to all persons who are in default on their tax liabilities. The Scheme is specifically targeted at taxpayers who: have not been fully declaring their taxable income/assets; have not been paying the tax due at all and or have been underpaying or under remitting.
And according to FIRS, “It does not matter whether the relevant tax default arose from undeclared assets within or outside the country. If tax should have been paid, VAIDS is providing a once in a lifetime opportunity to declare the tax outstanding and resolve it definitively.”
3. VAIDS Is An Opportunity To Avoid Criminal Prosecution: Let’s just say by not paying your fair share, the federal government will treat you like a criminal.
Upon conviction, you may be imprisoned for up to 5 years, while you will still be required to pay the tax due along with the associated interest and penalties.
Also Read: How To Reduce Your Tax Burden
4. It Doesn’t Matter If You Don’t Know How Much Tax You’re Owing: This is because, once you register for VAIDS by filing the Declaration form, agents of the Relevant Tax Authority can help you to calculate your tax liability.
5. You Don’t Have To Pay All The Tax You’re Owing At Once: The Federal Government appreciates that many defaulters have assets but may not have cash.
So, VAIDS makes provision for taxpayers to be allowed to enter into arrangements to pay outstanding tax liabilities in installments.
Taxpayers may, at the discretion of the relevant authority, be granted up to three years to pay their liability but will be obligated to pay interest on the outstanding balance.
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