AGF Malami’s Hard-Nosed Offer To Nigerians With Assets Abroad

By Richard Anyabe Abubakar Malami, Nigeria’s attorney-general and minister of justice, is not a businessman. Except of course, you are one of those who see law as business. But he possesses one of the shrewdest and most astute minds you would find in a government. He has taken his job the way an entrepreneur takes his business, always in search of opportunities that are favorable and options that are pragmatic and cost saving. Last week, Malami unveiled another item from his rich menu bag of pragmatism. As part of efforts at repatriating and channeling looted funds outside the country into developmental projects, the Federal Government unveiled the Voluntary Offshore Assets Regularization Scheme (VOARS). The scheme, an offshoot of the Executive Order 8 signed last year by President Muhammadu Buhari, would provide tax amnesty and permanent waiver of criminal prosecution to owners of offshore assets that are willing to voluntarily declare those assets. It is a sort of federal government amnesty for tax defaulters and looters willing to claim ownership of their assets in foreign countries. Speaking on the scheme, the AGF Malami, said the VOARS was a scheme that was initiated by the Swiss Consortium with a view to facilitating the regularizing of offshore assets owned by Nigerians. The scheme, according to him, provides the legal basis for the Swiss Consortium to approach third party holders of the fund, such as banks, estate managers, auditors and others, with the view of assessing information of the owners. The office of the AGF is already collaborating with the relevant Ministries, Departments and Agencies of government to develop a roadmap for the implementation of the Executive Order 8, as well as mechanism for taxation on funds to be declared by Nigerians as offshore assets. They include the Ministry of Finance, Accountant General of the Federation, the Federal Inland Revenue Service (FIRS) , Infrastructure Concession Regulatory Commission (ICRC), Nigeria Intelligence Agency (NIA), Nigeria Sovereign Investment Authority (NSIA), Central Bank of Nigeria (CBN) and Debt Management Office (DMO). While the input of the Swiss Consortium is noticeable, there is little doubt that the scheme has the imprint of Malami who takes a practical approach to complicated issues. It is a mantra that has worked for him and for the country since he assumed office as AGF. Explaining the rationale for the scheme, the AGF stated that the VOARS is to provide an opportunity for taxpayers or amnesty for tax defaulters to voluntary declare their offshore assets and income from sources outside Nigeria relating to the preceding 30 years of assessment and in return obtain some benefit like: Permanent waiver of criminal prosecution for tax offences and offences related to the offshore assets, penalties and interests concerning such declared offshore assets. In addition, he said, the volunteers would receive from the federal government of Nigeria an Offshore Assets Regularization Compliance Certificate on the declared and regularised offshore assets; be free to use or invest their duly regularised residual offshore assets in any manner in Nigeria or overseas, and be subject only to annual tax to the federal government of Nigeria on the income earned on such residual offshore assets. It is expected that those funds owned by Nigerians that are not in the system will be voluntarily declared by the owners, and when so declared by the owners, the Nigeria government will deduct 35 per cent as recoveries, while two and a half per cent will be charged as administrative fees for the purpose of assessing the funds, adding that 63 per cent will be registered in the system to become taxable in Nigeria. The Infrastructure Fund will serve as a proposed investment facility, where the Federal Government of Nigeria will have minimal investment, with the matching investments from banks and prospective international investors as well as Nigerians, holders of the 63 per cent who are expected to invest into this fund with the view of financing Nigerians infrastructure and bridging the deficient all attracting Foreign Direct Investment. The VOARS is an initiative that offers a lifeline to Nigerians with undeclared assets abroad. While they no longer have to operate in violation of the law, Nigeria also benefits from the tax remittances that would be generated from their assets. A similar scheme was launched for tax defaulters in Nigeria in 2017 to ensure more Nigerians and organizations are captured in the tax net. The Voluntary Asset and Income Declaration Scheme was launched as part of a nationwide crackdown on corruption and aims to rebuild Nigeria’s finances by tackling tax evasion. Nigeria has a long history of tax evasion by high net worth individuals and multinational companies and VAIDS was designed to take care of that. Government declared tax waiver for nine months from July 1, 2017 to March 31, 2018 with benefits such as waiver of interest and penalty, no prosecution of tax offences and no tax audit. Tax evasion is a criminal offence and it was a one-off opportunity for evaders to avoid the full force of the law. It opened an amnesty window for tax defaulters, to help regularize the tax paying process and bring a whole lot more people into the tax net. To this end, Nigeria has signed agreements with the United States, Canada, UAE, Switzerland, Mauritius, Panama and Bahamas. It must be noted that Malami’s pragmatism has often attracted public and media suspicion in a country unfamiliar with his style. Critics have often focused more on motives and had invented some when none existed. If Malami critics would care less about invented motives and focus more on results of his actions, they will undoubtedly begin to appreciate his choices. Malami is lucky that he has a principal who is focused on getting results and getting things done, instead of obsession with being politically correct. His lifelike approach to governance is something that has been missing in this country for long. At a time Nigeria is going through a painful economic recovery, tough, realistic initiatives are what is needed. -Anyabe wrote in from Abuja.