….Says Newly Created Audit Units Will Curb Illicit Financial Outflows
The Federal Inland Revenue Service (FIRS) on Monday disclosed that Nigeria lost $178 billion (about N5.4 trillion) to tax evasion by multi-nationals in 10 years.
To curb such abuses within the fiscal system, the Executive Chairman of the Service, Mr Muhammad Nami, said the Service had created additional tax audit units against illicit financial outflow and to improve tax compliance among multi-nationals doing business in the country.
The tax administrator disclosed this while giving his opening remarks at a workshop on Effective Audit of Multinational Corporations for Domestic Revenue Mobilisation in Nigeria, held in Abuja.
A statement by the FIRS’ Director of Communications and Liaison Department, Mr Abdullahi Ahmad, quoted the FIRS’ boss as saying at the forum that between 2007 and 2017 Nigeria was “reported to have lost over US$178 billion (about N5.4 trillion at today’s rate) through tax evasion by Multinationals” operating in the country.
Nami cited a 2014 Report by the High-Level Panel on Illicit Financial Flows from Africa, which stated that “Nigeria accounted for 30.5% of the money lost by the continent through illicit financial flows” to substantiate the high rate of illicit financial flows outside Nigeria.
Specifically, Nami said that 35 new Tax Audit Units were created across the country, last year, to ensure that companies operating in the country paid appropriate taxes.
The tax administrator expressed serious concern that “many rich Multinational Corporations do not pay the right taxes due from them, let alone pay their taxes voluntarily.
He said: “At the FIRS we are paying greater attention to tax audit in general and Transfer Pricing audit in particular in order to improve the level of tax compliance in the country. As a result, in the last one year, we have created more than 35 additional Tax Audit Units and deployed experienced and capable staff to take charge of these offices.”
Nami urged participants at the forum 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 in general,”
According to him, in view of the recent drop in Nigeria’s oil earnings, “taxation is expected to continue to shoulder the government’s budget performance the way it did in 2020”, adding that “this underscores the importance of this workshop, as tax audit of Multinational Corporations is very crucial in Nigeria’s domestic revenue mobilisation.
He stressed: “For me, this Workshop is an important step towards boosting compliance level; and, I have strong hopes that its outcome will further increase our efforts at driving tax compliance among Multinational Corporations in Nigeria.”