GFI reports Nigeria trade misinvoicing accounts for 15 per cent of all trade transactions

Analysis of trade misinvoicing in Nigeria in 2014 shows that the potential loss of revenue to the government was approximately $2.2 billion for the year according to a new study by Global Financial Integrity (GFI).

The Washington based non-profit organisation that quantifies and analyses illicit financial flows says that the amount lost through misinvoicing represents four per cent of total annual government revenue as reported to the International Monetary Fund.

The estimated value gap of all imports and exports represents approximately 15 per cent of the country’s total trade according to GFI.

Statistical evidence

The report entitled Nigeria, Potential Revenue Losses Associated with Trade Misinvoicing, analyses Nigeria’s bilateral trade statistics for 2014 (the most recent year for which sufficient data are available) which are published by the United Nation’s Comtrade.

The detailed breakdown of bilateral Nigerian trade flows in Comtrade allowed GFI to work out trade value gaps that are the basis for trade misinvoicing estimates.

Value discrepancies

Import gaps represent the difference between the value of goods Nigeria reports having imported from its partner countries and the corresponding export reports by Nigeria’s trade partners.

Export gaps represent the difference in value between what Nigeria reports as having exported and what its partners report as imported.

Revenue losses

The portion of revenue lost during the year due to the misinvoicing of exports was US$1.3 billion, the sum Nigeria would have collected via corporate income taxes had the exports been properly invoiced.

The portion of revenue lost due to the misinvoicing of imports was US$880 million.

The GFI report, Nigeria, Potential Revenue Losses Associated with Trade Misinvoicing, can be downloaded from here.



Categories: Trade Based Financial crimes News