Overview of the Voluntary Offshore Assets Regularization Scheme and Executive Order #008


The Voluntary Offshore Assets Regularization Scheme was launched by President Muhammadu Buhari on the 8th of October, 2018 and on the same date, an Executive Order (008) was signed by the President which became effective on the same date.

Prior to this order, in his quest to fight corruption and tax evasion in Nigeria, the Nigerian President has previously signed an executive order on Suspicious Assets, Executive Order (006), which sought to restrain owners of assets under investigation from carrying out further transactions on such assets. Similarly, the Voluntary Assets and Incomes Declaration Scheme was introduced as an opportunity for taxpayers to voluntarily regularize their tax status and pay any tax due with a promise of forgiveness of overdue interests and penalties and a guarantee  that they will be granted immunity for tax offences or tax investigations, which have been effective with the support of Economic and Financial Crimes Commission (EFCC) as it has led to significant increase in tax revenue, widening of the tax net and increased voluntary compliance with tax obligations.

To further tighten tax and money laundering laws therefore, and to widen the tax revenue to the Nigerian economy, President Muhammadu Buhari launched the Voluntary Offshore Assets Regularization Scheme and signed the Executive Order (008) to implement the scheme on the 8th of October, 2018. This will apply to all taxpayers who are resident in Nigeria for tax purposes. The Federal Government makes clear that the “scheme is open to all persons, entities, and their intermediaries holding offshore assets who are defaulting in their tax obligations in any way but excluding those who are already under investigation by law enforcement agencies in Nigeria or any other country and have been charged with any crimes including theft of public funds or obtaining offshore assets through corrupt practices”.

Benefits of the Scheme
The VOARS opens up an opportunity for Nigerian taxpayers who hold offshore assets and incomes to within a period of 12months, voluntarily declare their assets and pay taxes on them in exchange for some benefits. The order guarantees that any taxpayer who voluntarily complies within the 12 months period, to the conditions of the scheme would only be liable to pay a one-time levy of 35% of the total offshore assets with additional benefits of immunity from prosecution from tax offenses and offenses related to offshore assets among others.

Penalties for non-compliance
As a consequence, for non-compliance with the provisions of this scheme, defaulting taxpayers will be required to undergo investigation and enforcement procedures on the offshore assets held by them upon the expiration of the Scheme (12 months). This investigation will be based on information which will be obtained by the government automatically from the foreign countries where the offshore assets are held.

Possible Loopholes of the Scheme
As good as this scheme would be, several issues have been raised as regards its effectiveness and the possibilities of achieving its aims some of which are pointed out below:

Its implication on taxpayers that took advantage of the previously introduced VAIDS Scheme is unclear.  It is also not clear what period the assessments would cover and how far back the audits and investigations for defaulting taxpayers would go.

Also, the basis for the 35% one-time payment in exchange for the benefit of immunity for prosecutions for tax offences and offences relating to offshore assets is unclear, since Nigerian tax laws provide applicable tax rates on taxpayers’ income and not on the value of their properties, and this may be a result in situations whereby the amount would be significantly higher for individual taxpayers than the actual applicable tax rate (including interest and penalty) on the relevant income, except for individuals or entities with accumulated penalties and interests. Thus, the VOARS may not be sufficient as an incentive for taxpayers within this category.

It is also pertinent to note that the Companies Income Tax Act and the Personal Income Tax Act (PITA) make provisions for the exemption of any income derived from dividend, interest, rent and royalties, that are brought into Nigeria through government approved channels, from tax. Also, the PITA exempts fees and commission, received by a taxable person abroad, from tax, provided such fees and commission are brought into Nigeria through government approved channels.

Garba Shehu, the Presidential Spokesman, in the released statement explained that “the Federal Government, through the office of the Attorney-General of the Federation and Minister of Justice will set up a VOARS in Switzerland for all categories of taxpayers who have defaulted in the declaration of their offshore assets, payment of taxes due and collectible subject to the fulfilment of the terms and conditions as stipulated in the order, or any other subsequent complementary regulations that follow”. However, this statement is probabilistic, in that there is no guarantee that such arrangement with Switzerland as other tax havens, will hold as a large portion of their income come from investments by foreigners, and may as a result of its agreement with Nigeria to disclose information about Nigerian taxpayers lose their credibility as a tax haven. The uncertainty about the outcome of this agreement, as well as to what extent taxpayer’s information would be disclosed may be a major issue and a ground for non-compliance by defaulting taxpayers.

However, regardless of these uncertainties, the VOARS if successfully enforced may be to a large extent beneficial to the involved parties. The government get increased revenue from tax, and this can create an avenue for growth of the economy which every citizen would benefit from. More so, defaulting tax payers who comply with the provisions of the scheme may get to pay less than the amount they would have had to pay if they were investigated assessed for the number of years which they have defaulted. Therefore, all defaulting taxpayers, (individuals and corporate entities) are enjoined to endeavour to check their offshore assets and incomes to be sure of potential taxes that may arise therefrom and settle any outstanding taxes and also to check their records to compare their potential tax liabilities with the benefits they would derive in taking advantage of the Voluntary Assets Regularization Scheme and therefore take advantage of the Scheme where necessary, by making a one-time payment of 35% on the total value of the offshore assets.


Written by
Racheal Animashaun, ACA
Associate, Luca Pacioli Professional Services



Andersen Tax: Federal Government Launches the Voluntary Offshore Assets Regularization Scheme, October 12, 2018.

Deloitte Nigeria: Nigeria Releases New Executive Order to Combat Money Laundering and Tax Evasion, October 11, 2018.

Proshare Intelligent Investing:  PMB Signs Executive Order No.8 Mandating Nigerians With Foreign Assets to Pay Tax, October 11, 2018.

PWC: A new Executive Order on Voluntary Offshore Assets Regularisation Scheme (VOARS) has been introduced, October 10, 2018.

The Genius Media: President Buhari Tightens Tax, Money Laundering Laws with New Executive order, October 10, 2018.

This Day: Buhari Signs Executive Order on Suspicious Assets, July 6, 2018.

Sahara Reporters, New York: VAIDS: FIRS, EFCC To Tackle Tax Defaulters, April 12, 2018.

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