Nigerians Who Own Property In UK Panic Over New Law

Nigerians Who Own Property In UK Panic Over New Law

Officials of the Federal Ministry of Finance and the Federal Inland Revenue Service, FIRS, involved in Voluntary Assets and Income Declaration Scheme, VAIDS, said they have been inundated with calls from Nigerians in the United Kingdom seeking to inquire about how the new UK government Unexplained Wealth Orders, UWOs would affect their property in that country.

A source close to the finance ministry told PREMIUM TIMES on Sunday that the pressure from Nigeria property owners in United Kingdom was so overwhelming on Friday that at a point the dedicated hotlines for inquires crashed due to excessive pressure.

The source who requested that his name should not be revealed as he was not authorised to speak on the issue said the volume of inquiries have been overwhelming, particularly in the last 72 hours after the UK government announced the new UWOs regulation.

The UK government’s UWO which came into effect last week requires foreign owners of properties in the country to furnish the relevant tax authorities with details of the source of funding for such properties or risk forfeiture.

Under the new law, property owners could forfeit any property or a combination of properties valued at about £50,000 (about N25 million) or above, for which there are no adequate explanation on the legal source of funding for the acquisition of such properties.

Property owners appear to be battling with a two-pronged pressure to keep their assets from tax authorities in Nigeria and abroad.

Apart from the UK government’s UWO, the then Acting President Yemi Osinbajo had signed an executive order on June 29, 2017, to introduce a new tax policy, VAIDS, granting amnesty by way of full immunity from prosecution for tax defaulters.

Under VAIDS, tax defaulters would between June 1, 2017 and March 31, 2018 be allowed to regularise their tax status relating to previous tax periods if they voluntarily come forward to publicly declare their default.

But, taking advantage of the tax information exchange policy with foreign governments, Finance Minister Kemi Adeosun said the federal government had written to a number of foreign governments to request specific information about offshore trusts and bank accounts held by Nigerians.

Consequently, the minister said VAIDS Office has so far collated a huge cache of data of over five million Nigerian corporate organisations and individuals that have executed various contracts and have records with some of the key government revenue agencies.

She listed the agencies from which those records were sourced to include the FIRS, Nigerian National Petroleum Corporation, NNPC; Central Bank of Nigeria, CBN; Federal Airports Authority of Nigeria, FAAN; Federal Housing Authority, FHA; Petroleum Technology Development Fund, PTDF and the Nigerian Communications Commission, NCC.

With the introduction of the UWO by the UK government, the minister said Nigerian users of offshore structures were advised to take advantage of VAIDS to regularise their tax status before the March 31, 2018 deadline.

The data already in possession of the VAIDS Office, an official familiar with the matter told PREMIUM TIMES, involved many Nigerian UK property owners who may have under-declared their tax liabilities under the Nigerian tax system before shifting the funds abroad to invest in property acquisition.

PREMIUM TIMES learnt the bulk of those inundating the finance ministry with calls to book appointments with the VAIDS office were those requesting for extension of deadline for tax amnesty window to allow them complete their declaration documents.

“Most of the calls received in the last couple of days were from high net worth individuals, including company executives, bankers, lawmakers and even a governor,” the official said. “All seem to be in panic over the prospect of losing their investments.”

The official said some of the apprehensive Nigerian UK property owners were in Abuja on Friday to attempt to meet with the finance minister and officials of the VAIDS Office, despite not having a prior appointment.

“Most of the inquiries bordered on assurance from the government that VAIDs would protect them from potential asset forfeiture to the UK government. Others sought to know if their names appeared on the lists from overseas.”

Mrs. Adeosun did not answer calls to her telephones. She equally did respond to mails and text messages sent to her on Sunday.

The spokesperson to the minister, Oluyinka Akintunde, did not also pick up calls to his telephone, neither did he respond to text messages sent to him seeking his comment for this story.

With the federal government realising over N23 billion revenue from VAIDS between July 1 when it was launched and December 31, 2017, FIRS Chairman, Tunde Fowler, said government was targeting more tax revenue from the scheme this year.

Mr. Fowler, who described VAIDS as a viable strategy to boost the country’s low tax-to-gross domestic product, GDP, ratio, currently put at six per cent, said a lot of the revenue would come from property tax.

He said the FIRS sealed off over 3,000 properties in Abuja for failing to file annual tax returns.

He said government has asked owners of those properties to come forward and regularise their records, or risk court action that may end in their being disposed of.