Revenue generated from multinational companies continues to dwindle, no thanks to consistent tax evasion by the group. This was recently revealed by the the Federal Inland Revenue Service, FIRS with the revelation that Nigeria lost about ₦5.4 trillion between 2007 and 2017 through tax evasion by multinational companies operating in Nigeria.
Executive Chairman of the Service, Mr. Muhammad Nami stated that “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 cited a 2014 report by the High-Level Panel on Illicit Financial Flows from Africa, which stated that “Nigeria accounted for 30.5% of the money lost by the continent through illicit financial flows.”
Plans by FIRS to check the loss
Recall that Taxmobile.Online reported that the Federal Inland Revenue Service (FIRS) has created 35 additional Tax Audit Units in the country to stem illicit financial flow out of Nigeria and improve tax compliance rate.
The above development is contained in a statement issued and signed by Abdullahi Ismaila Ahmad, Director, Communications and Liaison Department of the FIRS on Monday, January 11 2020 after a “Workshop on Effective Audit of Multinational Corporations for Domestic Revenue Mobilisation in Nigeria,” organized by the Service in conjunction with the Tax Justice Network.
According to Nami,
“at the FIRS we are paying greater attention to a tax audit in general and Transfer Pricing audit in particular to improve the level of tax compliance in the country”
He then added that,
“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.
Taxation to the rescue
He further stated that with the signing of the 2021 budget of ₦13.588 trillion and given the recent decline of oil fortunes, “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.”