…creates new audit units against illicit financial flow
Tax evasion by multinational firms doing business in Nigeria may have cost Nigerian government $178 billion between 2007 and 2017, Executive Chairman, Federal Inland Revenue Service (FIRS), Muhammad Nami, said yesterday in Abuja.
Though he refrained from giving identities of multinationals evading taxes in Nigeria, Nami said that some multinational corporations were “leading in tax compliance in various sectors.”
He expressed worries that “many rich multinational corporations do not pay the right taxes due from them, let alone pay their taxes voluntarily.”
The FIRS boss spoke at a “workshop on effective audit of multinational corporations for domestic revenue mobilisation in Nigeria,” organised by the Service in conjunction with the Tax Justice Network.
He added that to stem illicit financial flow out of Nigeria and improve tax compliance rate in the country, FIRS created 35 additional Tax Audit Units in the country last year.
Nami tasked the workshop participants 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. He also 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.
“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,” he said.
He further stated that with signing of the 2021 budget of N13.588 trillion on December 31, 2020, by President Muhammadu Buhari and given the recent decline of oil resources, “which had been the major revenue earner for the country, taxation is expected to continue to shoulder government’s budget performance the way it did in 2020.
“This underscores the importance of this workshop, as tax audit of multinational corporations is very crucial in Nigeria’s domestic revenue mobilisation.
“For me, this workshop is an important step towards boosting compliance level and, I have strong hope that its outcome will further increase our efforts at driving tax compliance among multinational corporations in Nigeria,” he said.