National Tax Policy, tax amnesty and VAIDS: principles, stakeholders and schemes

A new tax is announced in the budget and takes effect the next week. A trader asks whether that is allowed, because the National Tax Policy says there should be a transition period. A company with years of unfiled returns hears that an amnesty once forgave penalties and interest, and wants to know what it required in return.

A politician promises to cut taxes, and the policy says parties should publish their tax agenda. These are all questions on the policy that guides Nigerian tax law and on the schemes that were run to bring defaulters back.

This topic covers the revised National Tax Policy 2017: its objectives, the guiding principles, taxation as a tool for development, the responsibilities of each stakeholder, the administration guidelines for the three tiers of government and the implementation measures. It also covers tax amnesty, including the Voluntary Assets and Income Declaration Scheme (VAIDS) and the Voluntary Offshore Assets Regularisation Scheme (VOARS). The previous topic covered the types of taxes and tax systems. The next covers returns, assessments and payment.

Key terms in plain English

Syllabus check

This topic is in syllabus area A, introduction to taxation, tax administration and ethics (20% of marks). It covers:

• the objectives, principles and goals of the National Tax Policy;
• the responsibilities of stakeholders and the guidelines for tax authorities;
• the implementation measures, tax amnesty, VAIDS and VOARS.

CAMA 2020 and the tax policy

The Companies and Allied Matters Act 2020 (CAMA 2020) is the company law of Nigeria. The sections below apply to this topic.

The rules in more depth

Objectives of the National Tax Policy

The National Tax Policy provides the fundamental guidelines for the orderly development of the Nigerian tax system.

It is expected to:

• (a) guide the operation and review of the tax system
• (b) provide the basis for future tax legislation and administration
• (c) serve as a point of reference for all stakeholders
• (d) provide a benchmark on which stakeholders are held accountable
• (e) provide clarity on the roles and responsibilities of stakeholders

Guiding principles of the tax system

All existing and future taxes are expected to align with these features:

1. Equity and fairness: the system is fair and without discrimination, and taxpayers pay according to their ability.
2. Simplicity, certainty and clarity: laws and administrative processes are simple, clear and easy to understand.
3. Convenience: the time and manner of fulfilling tax duties consider the taxpayer’s convenience and avoid undue difficulty.
4. Low compliance cost: the financial and economic cost to the taxpayer is kept to the barest minimum.
5. Low cost of administration: administration is efficient and cost-effective in line with international best practice.
6. Flexibility: taxation is flexible and dynamic, in a way that does not retard economic activity.
7. Sustainability: the system promotes sustainable revenue, economic growth and development, with synergy between tax and other economic policies.

Taxation as a tool for economic management and development

The tax system should support sustainable growth and development at all times, and so should be geared to these goals.

The policy adds that taxation is an important tool for national development. Wealth created by economic activity is one measure of growth, and one means of creating wealth is meaningful employment, which lets citizens earn income, meet their needs and pay tax. Taxes give government sustainable revenue and also make citizens stakeholders who contribute directly to national development.

In return, government should use the tax system as a sustainable platform for growth, creating wealth and jobs for those now outside the tax net because of low or no income, so that they earn income, pay tax and sustain the cycle.

Responsibilities of the stakeholders

The federal and State Ministries of Finance have primary responsibility for tax policy, including proposals to amend tax laws, and work with the stakeholders. The key stakeholders are:

• The government (all levels and arms, ministries, extra-ministerial departments and agencies) shall implement and regularly review tax policies and laws; provide information on all revenue collected each quarter; ensure adequate funding and administrative and operational autonomy for tax authorities; and ensure a reasonable transition period of three to six months before a new tax starts.
• The taxpayer is a person, group or entity that pays or is liable to tax, and is the most critical stakeholder. He treats tax as a civic obligation and constant duty to discharge as and when due. He is entitled to relevant information for his obligations; prompt, courteous and professional help from tax authorities; the right to object to decisions and assessments and get a response within reasonable time; a fair and impartial appeal; and self-representation or an agent of his choice, provided an agent acting for reward is an accredited tax practitioner.
• Revenue agencies shall treat the taxpayer as a customer; ensure efficient implementation of tax policies, laws and treaties; facilitate inter-agency co-operation and exchange of information; undertake timely audits and investigations; carry out tax awareness and education; and set up a robust process to prevent, detect and punish corrupt tax officials.
• Professional bodies, tax practitioners, consultants and agents shall act in line with their professional code of conduct and ethics; not aid or abet tax evasion and corruption; and actively promote effective tax compliance.
• Media and advocacy groups shall promote tax education and awareness; articulate, protect and advance taxpayers’ rights; advance accountability and transparency in using tax revenue; report accurately, objectively and in a balanced way; and make sure that aspiring political office holders understand the tax policy and the Nigerian tax system and can state their plans for it.

Administration across the three tiers

Tax administration cuts across the three tiers of government, and the policy sets out guidelines that tax authorities at all levels follow.

• Registration of taxable persons: all taxable persons are registered and given a nationwide taxpayer identification number (TIN). Authorities use the databases of the CBN (BVN), the NIMC, the NCC, the CAC, the FRSC, the NIS and other sources, and the uncoordinated registration by different agencies is harmonised.
• Tax compliance: government applies all resources and tools to bring about voluntary compliance. The authorities ensure that self-assessment is in place, with simple procedures; frameworks for tax amnesty to widen the net; a focus on taxpayer services and constant tax education; periodic measurement and reporting of the performance of the tax system; and a system to recognise and honour compliant taxpayers.
• Efficiency of administration: government provides adequate funding for tax authorities, as an adequate percentage of the revenue collected; it funds tax refunds, and authorities pay refunds promptly and efficiently; payment procedures and documentation are convenient and cost effective, and authorities work to improve Nigeria’s position on the global index of ease of paying taxes; and governments give their tax authorities a reasonable level of financial and administrative autonomy.
• Technology and tax intelligence: authorities use technology in all aspects of administration, keep the database accurate and up to date, and run a workable and secure structure for intelligence and information gathering.
• Dispute resolution: the authority and stakeholders use all friendly means, including arbitration, and resort to a court only as a last resort.

Implementation measures

The Federal Ministry of Finance has the pivotal role in developing and implementing the policy, and needs the cooperation of the following.

• The President and governors: budget speeches consistently contain overriding fiscal policies and summary statements of expected tax revenue; work towards only one revenue agency for each level of government, so that other ministries and agencies do not become tax collectors; and sponsor a bill to set up a tax court as an independent body to settle tax matters.
• The legislature: national and State assemblies set up a taxation committee, separate from the finance committee, to focus on tax matters and work with the policy implementation committee; pass an establishment Act for the Joint Tax Board, widening its mandate beyond advice; and review the qualification for the lower rate for small businesses, and reduce that rate further to encourage compliance and MSMEs.
• The Ministry of Finance: starts tax reform and streamlines laws; sets up a tax policy implementation committee to monitor compliance and review the policy; makes sure all ministries and agencies automate collection and remittance of taxes; works with the legislature so that tax law changes are enacted with the Appropriation Act of the same year; sets up an office of tax simplification; creates a dedicated tax policy website; reports regularly to the National Economic Council; has authorities develop key performance indices so that Nigeria reaches the top 50 on the global index of ease of paying taxes by 2020 and keeps improving; and sets a minimum threshold for VAT registration and compliance to protect micro businesses.
• Ministries, departments and agencies: the heads report periodically to the Ministry of Finance on implementation of the policy.
• Tax authorities: through the Joint Tax Board, federal and State authorities set aside a uniform day each year as National Tax Day, and government ensures that taxation is taught at all levels of education. Authorities set up a framework for amnesty and whistle blowing, and respond promptly to changes in the business environment.
• INEC: by regulation, the Independent National Electoral Commission requires political parties to prepare and publish their tax agenda before and during election campaigns, so that parties consider the financial effects of their promises and voters can decide with information.

Tax amnesty and VAIDS

The Federal Government approved the Voluntary Assets and Income Declaration Scheme in 2017. Taxpayers had to disclose voluntarily any previously undisclosed asset and income for the preceding six years of assessment within a nine-month period from 1 July 2017. The Executive Order took effect on 1 July 2017. At expiry on 31 March 2018 it was extended by three months, and it closed on 30 June 2018.

Objective: to give taxpayers a time-limited chance to regularise their tax status for previous periods and pay tax due. In return for full and truthful declaration of undisclosed assets and income, taxpayers got forgiveness of overdue interest and penalties and an assurance of no criminal prosecution or tax investigation.

Eligibility: all persons and entities in default in any way, including those who had income or assets but had not registered; registered taxpayers with more to disclose or earlier disclosures to amend, or who did not file returns; those not fully declaring income and assets; those underpaying or under-remitting; those under audit or investigation; and those in a tax dispute prepared to settle out of court.

Valid declaration:

• the disclosure was voluntary
• it was full, frank, complete and verifiable in all material respects
• it was made on the VAIDS forms or in the way prescribed
• the tax payable was assessed by the relevant tax authority

Benefits: immunity from prosecution for tax offences; immunity from tax audit; waiver of interest; waiver of penalties; and the option of spreading payment of outstanding liabilities over up to three years as agreed with the authority. The waiver did not affect a court order or judgment already obtained for a default on which interest or penalty had accrued.

The reliefs applied to federal taxes and to those administered by State authorities.

Consequences of not taking part:

• liability to pay the principal in full
• interest and penalties
• prosecution under the relevant laws
• withdrawal of reliefs granted
• liability to a comprehensive tax audit
• any amount paid under the scheme could count as part payment of further tax due on undisclosed information

Confidentiality: all information given under the scheme is treated with utmost confidentiality, and an official who breaches it without authority is liable to prosecution under federal or State law.

VOARS

The Voluntary Offshore Assets Regularisation Scheme was introduced by Presidential Executive Order 008 on 8 October 2018. It offered taxpayers who had defaulted on tax on foreign assets and foreign-sourced income, for up to the preceding thirty years of assessment, a chance to declare and regularise. It ran for twelve months.

• Benefits: a one-time levy of 35% on all offshore assets in place of outstanding taxes; permanent waiver of criminal prosecution for tax and other offences relating to the offshore assets; immunity from tax audit of the declared assets; waiver of interest and penalties; an offshore assets regularisation compliance certificate; and freedom to use and invest regularised assets in Nigeria and elsewhere.
• Facility: the Attorney-General sets up the facility in Switzerland. Taxpayers access it by paying a 2% facility access fee and making full disclosures.
• Failure to comply: liability for the tax due, interest, investigation charges and enforcement in respect of offshore assets.

VAIDS and VOARS compared

Typical exam questions on the policy and the outlines to use

1. Explain five principles all taxes should follow. Pick five of the seven and write one clear sentence on each: equity (pay by ability, no discrimination), simplicity and certainty, convenience, low compliance cost, low cost of administration, flexibility and sustainability.

2. Explain three goals that let the tax system support sustainable growth. Take three from the seven development goals. A strong answer for wealth creation and employment gives three of its sub-points:

• policies promote employment, export and local production
• laws are not retroactive
• incentives are broad, sector based, tenured and transparent

For focus on indirect taxation: indirect taxes are easier to collect and harder to evade.

For convergence of rates: the highest marginal rates of personal income tax, capital gains tax and company income tax should draw together to reduce avoidance.

3. Explain the responsibilities of the government, the taxpayers and the revenue agencies. Give the four duties of government, the five entitlements of the taxpayer and the six duties of the agencies, as each earns marks.

4. Explain three tax administration issues in the policy. Registration with a nationwide TIN and harmonised databases; voluntary compliance through self-assessment, amnesty, taxpayer services and recognition of compliant taxpayers; technology and tax intelligence, including an accurate database and secure intelligence gathering.

5. State the specific objectives of the policy and explain the roles of the President and governors and the legislature in implementation. Five objectives; then budget speeches that state fiscal policies, one revenue agency per level of government and a tax court bill for the executive; and a taxation committee, an establishment Act for the Joint Tax Board and review of the small business rate for the legislature.

Why the policy matters in practice

The policy is not a law, but it is the reference point for new tax laws, for reform and for holding stakeholders to account. It explains why the Nigeria Tax Administration Act 2025 gives taxpayers the right to object within 30 days, why the Tax Appeal Tribunal sits independently of the revenue authority, and why the 2025 reform removes several overlapping levies.

A candidate who knows the policy can explain the reasons for a rule as well as the rule itself, which is what the higher-mark questions reward.

Tax amnesty: advantages and limits

An amnesty widens the tax net, because defaulters come forward in exchange for relief, and it brings in revenue that would otherwise be lost. It also gives the authority information about assets and income that were hidden, which helps later enforcement. Its limits are that it can seem unfair to those who always paid on time, and it can encourage default if taxpayers expect another amnesty to follow.

That is why the schemes were limited in time, why the declaration had to be full and verifiable, and why failing to join carried higher consequences: full payment, interest and penalties, prosecution and a comprehensive audit.

Checking a VAIDS-type question

1. Identify the period: VAIDS covered six years of assessment, VOARS up to thirty.
2. Identify the benefits: immunity, waiver, and payment over three years in VAIDS; the levy, waiver and certificate in VOARS.
3. Identify the conditions: voluntary, full, frank and verifiable, on the right forms, and assessed by the relevant authority.
4. State the consequence of not taking part.

Who must follow the policy

The policy speaks to the Federal Government and the States. Its aim is the same across the three tiers: one TIN, simple compliance, fair treatment and few taxes. Local governments are drawn in through the call to avoid multiple taxation, and through the Joint State Revenue Committee that links them to the State board.

Timeline of the schemes

Applying VAIDS to a case

1. The company is eligible: it was in default by not filing and by under-declaring.
2. It must make a full, frank, complete and verifiable disclosure on the VAIDS forms, and the authority assesses the tax.
3. It pays the tax of ₦15,000,000, over up to three years if agreed. The interest and penalties of ₦9,000,000 are waived, and it gets immunity from prosecution and audit on the declared matters.
4. If it had not taken part, it would owe the ₦15,000,000 plus the ₦9,000,000, face prosecution, and could be audited fully.

What each stakeholder gains from the policy

Taxpayers gain certainty, a right to object and appeal, and courtesy from the authorities. Government gains a broader tax base and more compliance. Revenue agencies gain a clear mandate and a defined duty to educate and to punish corruption. Professional bodies gain a recognised role in promoting compliance and in refusing to aid evasion.

The media and advocacy groups gain a defined duty to educate and to hold authorities to account. Because every stakeholder has a listed role, a failure can be traced to the stakeholder responsible, which is the purpose of the fifth objective of the policy.

The position from 2026

Both schemes are closed, and neither is open under the Nigeria Tax Act 2025. Several aims of the policy are reflected in the 2025 reform laws: fewer levies (the 4% development levy replaces several), harmonised administration, a Joint Revenue Board in place of the Joint Tax Board, and an Office of the Tax Ombud. For questions on the policy and the schemes themselves, use the 2017 policy and the Executive Orders as above.

Worked examples

1. The policy requires a transition period of three to six months.
2. The earliest start is 1 June 2026 (three months), and it may be as late as 1 September 2026.

1. One-time levy.
   35% × ₦200,000,000 = ₦70,000,000, in place of back taxes.
2. Facility access fee.
   2% × ₦200,000,000 = ₦4,000,000.
3. Total cost = ₦74,000,000, with waiver of interest, penalties and prosecution.

1. (a) Eligible: those with income or assets who had not registered.
2. (b) Eligible: those under audit or investigation could take part.
3. (c) The waiver did not undo a court order already obtained, so the amounts in the order remain payable.

How to score full marks

• List the seven principles and the five objectives, one mark each, with a short explanation.
• Answer a stakeholder question with three roles for each stakeholder, as the marking guide gives a mark per role.
• State the dates and figures for VAIDS and VOARS: six years, nine months, three years, 35% and 2%.
• Add the point that the schemes are closed and that the 2025 laws carry the policy forward.

Common mistakes in the exam

• Giving the stakeholders’ duties without the matching rights of the taxpayer.
• Confusing the policy’s principles with the goals for development.
• Mixing VAIDS and VOARS figures.
• Saying VAIDS covered only the Federal Government taxes.

Quick revision

• Five NTP objectives. Seven principles. Seven development goals.
• Five stakeholders. Transition period three to six months.
• VAIDS: 2017, six years, three-year payment plan. VOARS: 2018, 35% levy, 2% fee.

Practice questions

Questions 1 to 10 are multiple choice. Questions 11 to 13 are written. Try each before opening the answer.

Model answers

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