Anambra introduces tax waiver scheme for voluntary asset, income declaration

The Anambra State Government has launched the Voluntary Assets, Income Declaration and Tax Regularisation Scheme (VAIDS), a time-limited initiative running from July 6 to September 5, 2026. This scheme offers individuals, businesses, and other organisations with outstanding tax obligations a unique opportunity to regularise their tax records without incurring full penalties. Participants who make full and honest disclosures will benefit from a 100% waiver of penalties and accrued interest, immunity from prosecution for disclosed tax liabilities, protection from tax audits for the declared periods, and access to flexible payment arrangements. This state-level VAIDS mirrors the earlier federal scheme, aiming to boost tax compliance and revenue generation while providing a window for taxpayers to rectify past defaults before stringent enforcement measures commence.

The Anambra State Government has recently unveiled its Voluntary Assets, Income Declaration and Tax Regularisation Scheme (VAIDS), a critical initiative designed to foster tax compliance and enhance the state's internal revenue generation. Running from July 6 to September 5, 2026, the scheme provides a finite window for taxpayers to voluntarily declare previously undisclosed assets and income, thereby regularising their tax status without facing the full brunt of penalties and prosecution associated with non-compliance.

This development is particularly significant for legal practitioners advising clients in Anambra State, as it presents both an opportunity and a potential pitfall. The scheme targets a broad spectrum of taxpayers, including unregistered individuals and entities, those with underreported income or assets, and even those currently under tax audit or dispute with the Anambra State Internal Revenue Service (AIRS). Understanding the scope, benefits, and implications of this VAIDS is crucial for guiding clients through the declaration process and ensuring adherence to the stipulated terms.

The Anambra VAIDS is a strategic move by the state government to broaden its tax base and improve fiscal discipline, following a national trend of tax reforms. It offers substantial incentives for voluntary disclosure, but also carries a stern warning of intensified enforcement against defaulters once the scheme concludes. This article will delve into the specifics of the Anambra VAIDS, its legal underpinnings, and the practical considerations for legal professionals and their clients.

Taxation in Nigeria operates under a federal system, with distinct responsibilities for federal, state, and local governments. Personal Income Tax (PIT) is primarily administered by State Boards of Internal Revenue, such as the Anambra State Internal Revenue Service (AIRS), under the provisions of the Personal Income Tax Act (PITA), Cap P8 LFN 2004 (as amended). Corporate entities, on the other hand, are subject to Companies Income Tax (CIT) governed by the Companies Income Tax Act (CITA), Cap C21 LFN 2004 (as amended), collected by the Federal Inland Revenue Service (FIRS). Other significant taxes include Value Added Tax (VAT) under the Value Added Tax Act (VAT Act), Cap V1 LFN 2004 (as amended), and Stamp Duties under the Stamp Duties Act (SDA), Cap S8 LFN 2004 (as amended), with collection responsibilities often shared between federal and state authorities depending on the nature of the transaction and parties involved.

The concept of a Voluntary Assets and Income Declaration Scheme is not new to Nigeria. The Federal Government launched its own VAIDS on July 1, 2017, through Executive Order No. 4 of 2017. This federal initiative provided a nine-month window, later extended, for taxpayers to regularise their tax status for previous years, covering various federal and state taxes. The federal VAIDS offered similar incentives, including waivers of penalties and interest, and immunity from prosecution and tax audit, aiming to improve Nigeria's low tax-to-GDP ratio and curb illicit financial flows. The Anambra State VAIDS thus builds upon a precedent set at the national level, adapting the framework to its specific state tax regime.

The Anambra State VAIDS, effective from July 6 to September 5, 2026, is a strategic intervention by the state government to address historical tax non-compliance. The scheme's broad eligibility criteria encompass a wide range of taxpayers, including those who have never registered, those with undeclared income or assets, and even those already embroiled in tax disputes or audits with the AIRS. This inclusivity aims to maximise participation and bring more taxpayers into the formal tax net. The benefits offered are substantial: a 100% waiver of penalties and accrued interest, immunity from prosecution for disclosed liabilities, and protection from tax audits for the declared periods. These incentives are designed to overcome the fear of retrospective penalties and legal action, which often deters voluntary disclosure.

Comparing the Anambra VAIDS with the federal VAIDS of 2017, both schemes share the core objective of encouraging voluntary compliance through incentives. The federal scheme, launched by Executive Order No. 004 of 2017, also offered waivers of penalties and interest, and immunity from prosecution and tax audits. A key difference lies in their jurisdictional scope and the specific taxes covered. While the federal VAIDS covered a wider array of taxes including Companies Income Tax, Petroleum Profits Tax, and Capital Gains Tax, the Anambra scheme focuses on taxes collectible by the state, primarily Personal Income Tax, Property and Land Use Charge, and other state-specific levies. The Anambra State Harmonised Taxes and Levies (Approved List for Collection) Law, recently signed, provides a modernised framework for state and local government revenue administration, which the VAIDS complements.

Practitioners must carefully assess the specific tax liabilities covered by the Anambra VAIDS. These would typically include personal income tax, business premises levies, property and land use charges (governed by the Property and Land Use Charge Law, 2011), and potentially withholding taxes on transactions between individuals or from state government contracts. The scheme's provision for flexible payment arrangements, subject to AIRS approval, is a practical concession that can ease the financial burden on taxpayers making significant declarations. However, the requirement for “full and honest disclosures” is paramount, as any misrepresentation could lead to the forfeiture of benefits and subsequent enforcement actions.

The legal framework for tax administration in Anambra State is primarily derived from the Anambra State Revenue Administration Law of 2010, which established the AIRS and outlines its powers for assessment, collection, and enforcement. The recent Nigeria Tax Administration Act 2025, which consolidated several tax reform bills, also provides a broader context for tax administration efficiency and compliance across the federation, influencing state-level approaches. The success of the Anambra VAIDS hinges on effective communication, robust administrative capacity of the AIRS, and the trust of the taxpaying public. The explicit warning of full enforcement post-scheme underscores the state's determination to improve compliance, making participation a strategic imperative for many.

One potential area for careful consideration is the interplay between state and federal tax obligations for businesses operating across jurisdictions or individuals with diverse income streams. While the Anambra VAIDS addresses state-level taxes, taxpayers may still have outstanding federal tax liabilities. Legal advice should therefore encompass a holistic review of a client's entire tax profile to ensure comprehensive compliance and avoid future issues with either federal or state tax authorities. The scheme's immunity from prosecution and tax audit is limited to the disclosed liabilities and periods, meaning undeclared matters or future non-compliance could still attract severe consequences.

The Anambra State Voluntary Assets, Income Declaration and Tax Regularisation Scheme presents a critical, albeit limited, opportunity for taxpayers within the state to rectify past tax defaults and embrace full compliance. Legal practitioners should proactively engage with their clients to assess their eligibility, identify undeclared assets and income, and guide them through the declaration process before the September 5, 2026 deadline. The benefits of 100% waivers on penalties and interest, coupled with immunity from prosecution and audit for declared periods, offer a compelling incentive that should not be overlooked.

Failure to participate in the scheme, particularly for those with known outstanding liabilities, will likely result in intensified enforcement actions by the Anambra State Internal Revenue Service, including comprehensive tax audits, imposition of full penalties and interest, and potential prosecution. Practitioners must therefore emphasise the urgency and strategic importance of leveraging this window of opportunity. As states across Nigeria continue to strengthen their tax administration frameworks, voluntary compliance schemes like Anambra's VAIDS are becoming increasingly common, signalling a broader shift towards more rigorous tax enforcement and a reduced tolerance for tax evasion.