Federal Inland Revenue Service (FIRS) has revealed how Nigeria lost about N5.4 trillion through tax evasion by multinational companies operating in Nigeria between 2007 and 2017.
The Executive Chairman of the Service, Muhammad Nami, who spoke, January 11 in Abuja, cited a 2014 report by the High-Level Panel on Illicit Financial Flows from Africa, which stated that “Nigeria accounted for 30.5 percent of money lost by the continent through illicit financial flows.”
he said that in order to check this revenue loss, FIR has created 35 additional Tax Audit Units in the country to stem illicit financial flow out of Nigeria and improve tax compliance rat
The Executive Chairman, who spoke at a workshop on effective audit of multinational corporations for domestic revenue mobilisation in Nigeria, said that some multinational corporations were leading in tax compliance in various sectors, expressing worries that “many rich Multinational Corporations do not pay the right taxes due from them, let alone pay their taxes voluntarily.”
He charged participants at the event to come up with a 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.
“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 N13.58trn on 31st December, 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.”
The event, according to a statement by the FIRS Director of Communications and Liaison Department, Abdullahi Ismaila Ahmad, was organized by the Service in junction with the Tax Justice Network.