* Learning from N5.4tr losses in tax evasion of 2007 to 2017
The Federal Inland Revenue Service (FIRS) has disclosed the creation of 35 additional Tax Audit Units in a bid to stem illicit financial flow out of Nigeria and improve tax compliance rate in the country.
The Executive Chairman of FIRS, Mr. Muhammad Nami, who disclosed this in Abuja on Monday, also said “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” doing business in the country.
He spoke at a workshop on “Effective Audit of Multinational Corporations for Domestic Revenue Mobilisation in Nigeria,” organized by the Service in junction with the Tax Justice Network, saying the new units were created last year.
Although Nami observed 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.”
Nami 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 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% of money lost by the continent through illicit financial flows.”
FIRS Director, Communications and Liaison Department, Abdullahi Ismaila Ahmad, in a statement, quoted Nami as saying, “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 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 the 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 hopes that its outcome will further increase our efforts at driving tax compliance among Multinational Corporations in Nigeria.”