Anambra AIRS: Tax Enforcement Begins for Non-Compliant Taxpayers

• The Anambra State Internal Revenue Service (AIRS) has begun statutory enforcement against non-compliant taxpayers following the expiration of the VAIDS scheme on September 5.
• Enforcement targets include those who failed to regularize VAIDS liabilities, ignored Best of Judgment assessments, or underpaid/under-remitted taxes.
• Potential enforcement actions range from demand notices and asset sealing to recovery of liabilities and prosecution for tax offenses.
• AIRS aims to expand its taxpayer database from 500,000 to one million and will primarily use digital systems for enforcement.
• An Alternative Dispute Resolution mechanism is being established by AIRS to address legitimate taxpayer complaints regarding assessments.

The initiation of these enforcement measures follows the recent expiration of the Voluntary Assets and Income Declaration and Tax Regularisation Scheme (VAIDS) on September 5.

The Anambra State Internal Revenue Service (AIRS) has officially launched comprehensive statutory enforcement actions against individuals, businesses, and corporate entities that have failed to meet their tax obligations within the state. This significant development was announced by Ikeazor Okonkwo, the Executive Chairman of AIRS, during a press briefing held at the agency's headquarters in Awka.

The initiation of these enforcement measures follows the recent expiration of the Voluntary Assets and Income Declaration and Tax Regularisation Scheme (VAIDS) on September 5. The VAIDS program had previously offered taxpayers a crucial window to regularize any outstanding tax liabilities and benefit from various concessions. With this scheme now concluded, the AIRS is moving forward with full compliance monitoring and enforcement, targeting a broad spectrum of non-compliant taxpayers across Anambra State.

The enforcement drive by AIRS specifically targets several categories of non-compliant taxpayers. This includes those who did not take advantage of the VAIDS scheme to settle their outstanding liabilities, as well as individuals and organizations that received Best of Judgment (BoJ) assessments but failed to either challenge or settle them within the stipulated timeframe. Additionally, the agency is pursuing entities identified for underpayment, under-remittance, or other failures to adhere to their statutory tax responsibilities.

Non-compliant taxpayers now face a range of statutory enforcement measures. These can include the issuance and service of final statutory Demand Notices, the sealing of premises or assets where applicable, and the recovery of outstanding tax liabilities through lawful means. For established tax offenses, the AIRS is prepared to initiate prosecution and commence court proceedings, underscoring the serious legal ramifications for continued non-compliance. However, in a move to ensure fairness, the AIRS is also establishing an Alternative Dispute Resolution (ADR) mechanism to address legitimate objections from taxpayers regarding their assessments, providing an avenue for resolution outside of direct enforcement.

The current enforcement push is part of a broader strategy by AIRS to significantly expand the state's tax base. The agency has already registered approximately 500,000 taxpayers in its database and aims to add another 500,000, bringing the total to one million. This ambitious target highlights the state's commitment to improving its internal revenue generation.

Notably, the enforcement process will be predominantly driven by digital systems, a strategic choice designed to minimize direct physical interaction between tax officials and taxpayers. Prior to commencing these actions, AIRS undertook extensive public sensitization efforts, utilizing various media channels, jingles, announcements in churches and markets, and public address systems to inform and educate the populace. Despite the commencement of enforcement, taxpayers with valid objections to assessments, demand notices, or Best of Judgment assessments are still encouraged to engage with the agency to regularize their affairs, particularly through the newly introduced Alternative Dispute Resolution mechanism.

Lawyers and compliance officers with clients in Anambra State should immediately review their clients' tax compliance status, particularly regarding outstanding liabilities under the expired VAIDS scheme, to mitigate risks of enforcement actions such as asset sealing or prosecution. They should also be aware of the newly established Alternative Dispute Resolution mechanism for challenging assessments.

Source: Original reporting via Punch