President Muhammadu Buhari on 20 May 2020, signed an amendment to the Executive Order 008 (the Order) on the Voluntary Assets Regularization Scheme (VOARS), 2018. According to the Presidency, the amendment to the Order was as a result of input from stakeholders and the need to strengthen implementation mechanisms and structures. The Order gives all persons, the opportunity to voluntarily declare, regularise their offshore assets and obtain benefits for such declaration, subject to fulfilment of the terms and conditions stipulated in the Order.
It should be recalled that in October 2018, President Muhammadu Buhari had signed the VOARS Executive Order 008. The Order provided legal backing for voluntary declaration of offshore assets, which was aimed at combating money laundering and tax evasion. Those who benefited under the VOARS were able to regularize their tax status for the preceding 30 years, receive immunity from tax audit on the declared assets, obtain a permanent waiver of all interest and penalties on declared and regularised assets, etc. In reality, only profits/gains on assets are taxable; not the actual asset base. The Government may be assuming that the asset is the tax liability. Please refer to our earlier newsletter in this regard.
This amendment to the Order is proactive when one considers global economic challenges which were exacerbated by the Coronavirus pandemic. Government is considering avenues to increase tax revenue and also expand the tax net. It remains to be seen, whether this amended Order would enable the government to achieve its goals. In the meantime, affected taxpayers are encouraged to take advantage of this window of opportunity.