Nigeria’s senate has initiated an inter-agency investigation into illicit financial flows (IFFs) and is contemplating the creation of a tax amnesty for the voluntary repatriation of funds to Nigeria.
The bulk of IFFs are initiated by multinational corporations that neglect, fail and refuse to pay taxes in countries where they generate substantial amounts of profit according to the senate.
Senators believe Nigeria loses approximately US$15 billion annually to offshore tax evasion, resulting in consistently low tax revenue capture, for example, of just 5.7 per cent of GDP in 2017.
Participating committees
Several committees – finance, anti-corruption and financial crimes, banking and insurance – have been told to investigate IFFs and scrutinise the federal government’s current policy framework for curbing the losses caused by them to Nigeria’s revenue flows.
The senate has also asked these committees, as well as the national planning committee, to examine the current framework used by the Federal Inland Revenue Service (FIRS) for tracing, identifying, preventing and sanctioning cross-border tax evasion and other IFFs.
Top level participation
Finance minister Zainab Ahmed as well as top executives at FIRS, the Economic and Financial Crimes Commission and Central Bank of Nigeria have also been called on to participate in the probe.
Representatives of the Independent Corrupt Practices Commission, Nigerian Financial Intelligence Unit, Nigerian Export-Import Bank, Nigerian National Petroleum Corporation and other relevant institutions are also expected to join the investigation.
Information exchange
The senate is calling these bodies together because it considers inter-agency cooperation is needed to facilitate information exchange to prevent revenue leakages, curb tax evasion and clamp down on money laundering operations.
The senate is also looking to create a framework and mechanisms to repatriate IFFs that have already flowed out of the country.
Categories: Trade Based Financial crimes News
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