President Buhari Imposes 35% On Nigerians Foreign Assets in New Executive Order

President Muhammadu Buhari has issued an Executive Order 008, titled “Voluntary Offshore Assets Regularization Scheme, VOARS”.

The new Executive Order (008) took effect from Monday, October 8, 2018, the day it was signed by the Nigerian President.

Senior Special Assistant to the President on Media and Publicity Garba Shehu, made this known in a Facebook post on yesterday. No other statement has been made available by Government as at press time.

The Executive Order requires all Nigerians to declare all offshore assets and incomes within the next 12 months, and pay 35% of gross assets valuation or more, as taxes and levy, regardless of incidence of double taxation paid to host countries.

According to the Order, “any taxpayer who truthfully and voluntarily complies with the conditions of the scheme, pays a one-time levy of 35 percent on the total offshore assets, or pays all outstanding taxes, penalties and interest after forensic audit of their offshore assets and income, shall obtain immunity from prosecution for tax offenses and offences related to offshore assets, among others”.

“Equally, failure of any defaulting taxpayer to take advantage of this scheme shall, at the expiration of the scheme result in investigation and enforcement procedures concerning offshore assets anywhere in the world pursuant to information now readily available through automatic exchange of information between Nigeria and foreign countries.”

In accordance with the new Order, the Federal Government, through the Office of the Attorney-General of the Federation and Minister of Justice will set up a VOARS in Switzerland for all categories of taxpayers who have defaulted in the declaration of their offshore assets, payment of taxes due and collectible subject to the fulfillment of the terms and conditions as stipulated in the order, or any other subsequent complementary regulations that follows.

To avoid abuse of this process, the Federal Government makes clear that the “scheme is open to all persons, entities, and their intermediaries holding offshore assets and are in default of their tax obligations in any way, including those who are not already under investigation by law enforcement agencies in Nigeria or any other country and have not been charged with any crimes including theft of public funds or obtaining offshore assets through corrupt practices.”

In signing the order, President Buhari noted that under the Nigerian law, every citizen has the duty to declare his or her income and assets and pay taxes on them.

President Buhari is optimistic that the new scheme will help to facilitate expedient regularization of offshore assets connected to Nigeria, create an expanded tax base for the Federal Government, and fund the Nigeria Infrastructure Fund in Switzerland.

Amidst concerns regarding the use of the Executive Order as oppressive instrument against political opponents in an election year, government has provided no comment on the application of existing bilateral tax MOUs.