12/01/21

AFRICA: Nigeria loses N5.4tr to tax evasion by multinationals, according to Revenue Service.

As published on thenationonlineng.net, Tuesday 12 January, 2021.

The Federal Inland Revenue Service (FIRS) has said Nigeria lost about N5.4 trillion between 2007 and 2017 through tax evasion by multinational companies in Nigeria.

Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami stated that between 2007 and 2017, Nigeria was reported to have lost over US$178 billion or about N5.4 trillion at today’s rate, through tax evasion by multinationals doing business in the country.

He cited a 2014 report by the High-Level Panel on Illicit Financial Flows from Africa, which stated that Nigeria accounted for 30.5 per cent of money lost by the continent through illicit financial flows.

According to him, to check this revenue loss, the FIRS said created 35 more tax audit units to stem illicit financial flow out of Nigeria and improve tax compliance rate.

In a statement signed by Abdullahi Ahmad, Director, Communications and Liaison Department, FIRS yesterday after a “Workshop on effective audit of multinational corporations for domestic revenue mobilisation in Nigeria,” organised by FIRS, in conjunction with the Tax Justice Network, Nami observed that some multinational corporations were leading in tax compliance in various sectors but many rich multinational corporations were also not paying the right taxes due from them, let alone pay their taxes voluntarily.

He charged participants at the workshop to come up with a novel methodology that would be used to uncover illicit financial flows and provide an overview of related policy options for enhancing tax revenue collection.

According to him, at the FIRS we are paying greater attention to tax audit in general and transfer pricing audit in particular to improve the level of tax compliance in the country.

He added that as a result, in the last one year, FIRS has created more than 35 more tax audit units and deployed experienced and capable staff members to take charge of these offices.

He pointed out that with the signing of the 2021 Budget of N13.588 trillion and given the recent decline of oil fortunes, which had been the major revenue earner for the country, taxation is expected to continue to shoulder the government’s budget performance the way it did in 2020.