Automatic Exchange of Information Implications for Nigeria. Yomi Olugbenro Partner & West Africa Tax Leader Deloitte & Nigeria)i

Transcription

1 Automatic Exchange of Information Implications for Nigeria Yomi Olugbenro Partner & West Africa Tax Leader Deloitte & Nigeria)i 9 November 2017

2 Agenda Introduction: The new world Understanding AEOI Implication and Benefits Concluding Thoughts For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 2

3 The new global order The gains and pains of globalization The world is now a global village and cross-border trading is the new norm. New business models and tools create challenge for Tax Authorities. Ensuring fair tax payment across jurisdictions require cooperation and appropriate tools for verifying compliance. The Global Forum on Transparency and Exchange of Information for Tax Purposes in the area of the automatic exchange of information, in particular with respect to the Common Reporting Standard. Cross-border business and the challenges Increasing need for verifying compliance A new world of collaboration and mutual assistance Globalization creates challenges for individual tax authorities Taxpayers are constantly looking for how to beat the system Different countries are in constant search of tools for tracing tax flow and verifying compliance Tax Authorities are often faced with Jurisdictional limitations Mutual cooperation and assistance as the way out Two-way flow of benefits Combating tax evasion become easier with automatic exchanges For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 3

4 Exchange of information Instruments and types of information exchanges EOI is global tax cooperation aimed at promoting transparency and tackling evasion. Request Spontaneous Automatic X Legal instruments for information exchange include: Double Tax Treaties (DTAs), Tax information Exchange Agreements (TIEA), and the Multilateral Convention for Mutual Administrative Assistance in Tax Matters (The Convention) For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 4

5 Understanding Automatic Exchange of Information AEOI Basics What? How? Why? When Systematic and periodic transmission of bulk taxpayer information by the source country to the residence country concerning various categories of income (e.g. dividends, interest, royalties, salaries, pensions, etc.). The information is normally collected in the source country on a routine basis, generally through reporting of the payments by the payer (financial institution, employer, etc). Helps resident country s Tax Authority to check accurate reporting of foreign source income. Information on acquisition of significant assets is used to evaluate net worth and fair reporting of income. Periodic automatic exchanges based on common reporting standards For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 5

6 The Global forum for Transparency & EOI How does it impact Nigeria? A united front for global transparency and fair tax reporting. Automatic exchange of information (AEOI) Current status of AEOI Nigeria and AEOI Global movement to tackle the problem of illicit financial flows/tax evasion Mandatory EOI (between authorities) using Common reporting standards (CRS) 95 jurisdictions have signed the AEOI framework 49 jurisdictions have committed to make first exchanges by 2017 with a further 53 adopting 2018 Nigeria is signatory to AEOI framework agreement. First exchanges in view Nigeria Govt. claimed to have received UK and UAE asset ownership info Linked with FATCA which also aims at reducing tax evasion Already over 2,000 bilateral exchange relationships Nigeria Govt embarked on Project Lighthouse to trace asset information For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 6

7 The Global forum for Transparency & EOI The Global Forum and the Africa Initiative Global forum is made up of 146 members, including Nigeria Special focus on Africa with The Africa Initiate. ATAF providing support Africa First Movers are committed to 5 concrete targets by EOI unit in place 2. Delegate competent authority function 3. Sign MAAC 4. Make 30 requests for tax information up to Monitor increase in revenue through EOI Leading African countries ( First Movers ): Burkina Faso, Cameroon, Gabon, Ghana, Kenya, Morocco, Nigeria and Uganda. African Members of the Global Forum: Benin, Botswana, Burkina Faso, Cameroon, Chad, Cote d Ivoire, Djibouti, Egypt, Gabon, Ghana, Kenya, Lesotho, Liberia, Mauritania, Mauritius, Morocco, Niger, Nigeria, Senegal, Seychelles, South Africa, Tanzania, Togo, Tunisia and Uganda For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 7

8 The journey History of AEOI 2010 FATCA In 2012, UK, France, Spain, Italy & Germany) agreed on a reciprocal EOI of FATCA under Intergovernmental Agreements (IGAs) 2003 EU Savings Directive formal request to OECD by G20 for CRS 2014 OECD agreed text of CRS and commitment form 44 early adopter jurisdictions committed to implementing the CRS by 2017 or OECD & Global Forum ensuring implementation of CRS across the globe. Workshops & technical assistance being provided Global Forum reviewing confidentiality rules and practices Early Days Coming to CRS Implementing CRS For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 8

9 How does AEOI work? The process involved 7. Residence country analyses the results and takes compliance action as appropriate. Tackling evasion through AEOI 1. Payer or paying agent collects information from the taxpayer and/or generates information 6. Residence country feeds relevant information into an automatic or manual matching process. 5 Information is received and decrypted 4. Information is encrypted and bundles are sent to residence country tax authorities. 2. Payer or paying agent reports information to the tax authorities. 3. Tax authorities consolidate information by country of residence For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 9

10 What is in it? Benefits to Nigeria Increases voluntary compliance and tax revenue Educate taxpayers on their reporting obligations Education Revenue Detection Detect cases of non-compliance Encourages accurate reporting. Accuracy Deterrent Deterrent effects Information Provides timely information For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 10

11 The Global forum for Transparency & EOI Many countries are already reaping the benefits 326 million euros Australia recovered about 326 million EUR in 2013 due to EOI 330 million euros Sweden recovered 130 million EUR due to EOI requests and 200 million EUR due to voluntary disclosures between 2010 and billion euros France had recovered about 1.85 billion EUR as at September 2014 under its voluntary disclosure program Source: Organisation for Economic Co-operation and Development 80 billion euros As at March 2017, countries have already received about 80 billion EUR in unplanned additional revenue as a result of voluntary disclosure programmes and other similar initiatives in the lead-up to the first exchanges For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 11

12 The Global forum for Transparency & EOI Implications for Nigeria 01 Cost minimisation Financial information will be obtained passively from other jurisdictions without additional substantial cost 04 Increased tax revenue Recovery of tax revenues lost to non-compliant taxpayers will be enabled 02 Compulsory divulgence of information Information on the assets and financial interests of individuals and companies will be readily available 05 Voluntary disclosures Taxpayers will be encouraged to report all relevant information 03 Reduced tax evasion The possibility of tax evasion will be reduced and formerly undetected tax evasion will be discovered 06 Discouragement of capital flight Individuals will be discouraged from moving funds out of Nigeria leading to increased capital for investment For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 12

13 Nigeria is leveraging global support Drive for asset tracing & tax reporting is gaining momentum For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 13

14 Nigeria and asset tracing Project lighthouse and the chase Objective Information collation to: ascertain asset ownership; and degree of tax compliance Project Lighthouse Data sources BVN records Nigeria Finance Intelligence Unit records FATCA information CAC records Panama/Paradise papers WikiLeaks records CSCS share ownership records Forex allocation returns Ownership of prime property in Nigeria Findings Incongruity between income/ assets of Nigerians and overall level of tax compliance Action plan Opportunity for regularization through VAIDS Crackdown on defaulters after the amnesty window For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 14

15 Nigeria and the new awakening Sensitization and awareness campaigns For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 15

16 Concluding thoughts Where do we go from here? Time is up! Understand the times! Time has changed and still changing. With the new global cooperation, secrecy and dishonesty are more likely to be found out. Falsification and hiding information is not tax planning Compliance is cheaper than default. Impact of financial and reputational risks must be carefully weighed For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 16

17 Concluding thoughts More concerted tax compliance requirements from revenue Hiding information is not tax planning. With the new global cooperation, secrecy and dishonesty are more likely to be found out For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 17

18 Thank you For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 18

19 Questions / Comments For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 19

20 About the speaker Profile of Yomi Olugbenro Yomi Olugbenro is a Partner and the West Africa Tax Leader at Deloitte. He is a member of Deloitte West Africa Executive Committee. Yomi Olugbenro, FCA, FCTI Partner & West Africa Tax Leader YomiOlugbenro YomiOlugbenro yomiolugbenro.com He is an alumnus of The University of Manchester (UK) and Fellow of both the Institute of Chartered Accountants of Nigeria (ICAN) and the Chartered Institute of Taxation of Nigeria (CITN). He is the Vice Dean of the Board of Indirect Tax Faculty of CITN and a Member of the Board of Tax & Fiscal Policy Faculty of ICAN. With about 20 years professional experience, Mr. Olugbenro has gathered a broad range of experience, cutting across various industries and expertise with strong relationships with regulatory authorities and agencies of government. He has distinguished himself as a seasoned advisor on tax and fiscal policy issues. He has extensive experience in various specialized tax projects including business tax, employment tax international tax, transfer pricing, transaction tax, tax dispute resolution, tax strategy and risks, tax structuring and optimisation strategies. He is a regular speaker on tax and fiscal policy issues and has facilitated several trainings within and outside the country For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 20

21 About Deloitte A globally trusted brand Our Global footprint One integrated firm delivers global best practice globally and locally to our clients Deloitte clients include 83 percent of the 2015 FORTUNE Global 500 companies 3 Offices 25 Partners Over 500 professional staff CEO, Fatai Folarin Guided by a common purpose: To make an impact that matters We are busy building the #1 professional services firm in Nigeria Deloitte has Africa covered - Deloitte services 51 African countries with physical presence in 34. Our vast footprint of the integrated Anglophone countries, Deloitte Africa, spans 15 countries, including Botswana, Burundi, Ethiopia, Ghana, Kenya, Malawi, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Zambia and Zimbabwe, across 27 offices and cities. Deloitte offices Countries serviced Countries not serviced For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 21

22 Deloitte globally FY For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 22

23 It is understood that this session is aimed at sharing general knowledge and presenting the speaker s perspectives about the subject. No representation or warranty (express or implied) is given as to the completeness or accuracy of the information contained in this document. The views expressed in this presentation are those of the speaker, and are based on available facts, publicly available information and personal judgement as at the time of this seminar. The views expressed herein do not in any way represent the views of the author s employer/firm, the organiser of this seminar or relevant regulatory authorities. This presentation or seminar should not be used as a binding opinion neither should they be relied upon as basis for taking personal or business decision without obtaining specific professional advice and guidance. The author does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this presentation or for any decision based on it For information, contact Akintola Williams Deloitte. All rights reserved Nigeria s changing regulatory landscape Focus on AEOI and VAIDS 23

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