The Whistle Blowing Policy was created by the Federal Ministry of Finance and approved by the Federal Executive Council in December 2016. The policy is targeted at encouraging patriotic citizens to report criminal acts such as mismanagement or misappropriation of public funds and assets, like properties and vehicles; diversion of revenues, financial malpractice or fraud; collecting /soliciting bribes; procurement fraud; corruption; unapproved payments; kickbacks and over-invoicing. It also includes: violation of law regulation, company’s policy, or a threat to life, public interest and national security. The Senate passed the Whistle Blowers Bill to Law in July 2017.
HIGHLIGHTS OF THE WHISTLE BLOWING POLICY
WHISTLEBLOWING AND TAX EVASION
On Friday, 11th May 2018 the Minister of Finance announced the payment of about $1,351,506USD to 14 whistleblowers. The reward is connected to the tip-off by the whistleblowers that led to the recovery of huge amount of money from corporate tax evaders. According to the honourable Minister, “about $41,144,000.00USD consisting N7.8 billion, $378 million and £27,800 were recovered.” The companies had consistently evaded and avoided paying tax for years.
“Common violations by non-compliant tax payers include deliberate under-declaration or non-declaration of income earned, including income from government contracts and overseas trading, and collection of Value Added Tax (VAT) and refusing to duly remit to FIRS.”
“Others included charging of non-allowable personal expenses to company accounts, particularly with reference to overseas school fees; inconsistency between income declared for tax purposes and the value of assets owned”
In June, 2017 the Federal Government had “released about $1,044,724 USD for payment of 20 whistleblowers who provided information that led to the recovery of over N11.6 billion”.
In June 2017, the Federal Government issued Executive Order No. 004 of 2017 on the Voluntary Assets and Income Declaration Scheme (VAIDS). The Executive Order authorizes the federal and state governments to allow defaulting taxpayers to voluntarily declare their assets and income, pay due taxes and enjoy immunity from punishment.
The government recently extended the deadline for the Voluntary Assets and Income Declaration Scheme (VAIDS) to June 30, 2018. The extension period is believed to witness more tips from whistleblowers on tax evasion.
Flowing from this recently publicized reward of whistle-blowers, it is expected that more tips will be received by the Federal Ministry of Finance; both genuine and frivolous. It is important that the Federal Ministry of Finance put measures in place to thoroughly investigate claims. Undoubtedly, the whistleblowing policy within the context of tax evasion and default will drive increased revenue for the government; bring more people within the tax net and ultimately go a long way in tackling one of the major white collar crimes in Nigeria; Tax Evasion