On Monday, 8th October 2018, President Muhammadu Buhari signed an executive order (EO 008) launching the Voluntary Offshore Assets Regularization Scheme (VOARS).
VOARS offers a 12 month window allowing taxpayers with undisclosed offshore assets and income to voluntarily declare the assets and pay the corresponding taxes on such assets/incomes. VOARS commences from 8th October 2018 and will last for 12 months.
Scope of VOARS
VOARS is targeted at all categories of taxpayers (individuals and corporate entities) who failed to disclose offshore assets/incomes within the past 30 years of assessment. VOARS is not available to the following persons:
Participation in VOARS and Benefits
Persons seeking to take advantage of VOARS must voluntarily and truthfully declare their offshore assets in line with the guidelines of VOARS and pay a one-time levy of 35% on the total offshore assets. This will entitle such persons to the following:
Reliefs under VOARS will not affect court orders or judgments in particular cases.
Legal Issues Arising from VOARS
Section 23 Companies Income Tax Act (CITA) gives the President the power to amend the provisions of CITA including the tax rate. Similar express provisions do not exist within the Personal Income Tax Act (PITA), Petroleum Profits Tax Act (PPTA) or the Capital Gains Tax Act (CGTA). In fact the proviso to Section 3(f) of the PPTA restrains the Minister of Petroleum from giving any directive altering in any way the provisions of the PPTA. Thus the power of the President to grant the reliefs stated above may be limited under certain circumstances.
Notwithstanding, VOARS is a step in the right direction and marks another creative use of the instrument of executive orders by this Administration.
Adebiyi Tax & Legal
House 20 Wema Terrace
Udi Street Ikoyi
This Legal Alert contains information on tax /legal issues. It does not constitute legal or professional advice on such issues. Where specific legal advice is needed, the services of a solicitor/tax adviser should be sought.