The recent revelation by the Chairman, Federal Inland Revenue Service (FIRS), Mr Tunde Fowler, to the effect that Nigeria loses about $15 billion annually to tax evasion is as mind boggling as it is deplorable. This undesirable trend requires stiff sanctions as it is not only an economic crime but also stifles the nation’s development
Fowler, who made the disclosure at a recent meeting in Abuja to chart ways of combating offshore tax evasion through exchange of information regime, did not, however, provide details of the annual revenue loss in the country. He promised that Nigeria would implement the first Automatic Exchange of Information standard in 2020.
In a statement on the event, FIRS said that the regime was part of Nigeria’s commitment to improving transparency in tax administration, increased tax revenue collection, enhanced effectiveness and efficiency service delivery.
The FIRS boss said that there was a strong linkage between tax compliance, domestic tax investigation, tax audit, information gathering framework and the international infrastructure for exchange of information amongst authorities and countries.
He said: “Nigeria had demonstrated her commitment to improving transparency around tax matters, when she signed a declaration and joined the Multilateral Competent Authority Agreement (MCAA) on Automatic Exchange of Financial Account Information (AEOI) on 17th August, 2017.
“Furthermore, to facilitate the process of implementing the Automatic Exchange of Financial Account Information under the Common Reporting Standard (CRS), Nigeria published the AEOI regulations in the Official Gazette of the Federation.
“It also finalsed and issued CRS guidelines, constructed and finished a dedicated building for the operation of the AEOI and put in place the necessary Information and Communication Technology (ICT) infrastructure to operationalise the AEOI processes.
“Nigeria has done all these to enable us conduct the first exchange of information under the automatic exchange of information regime by September 2020.
“I encourage those countries in the Economic Community of West African States (ECOWAS) sub-region who have not committed to implementing the AEOI standards to take necessary steps to do so, especially as the automatic exchange of information portend huge benefits for domestic resource mobilisation”.
He said that increase in mobility of income and assets had created a challenge for tax administration and that governments across the world were joining efforts to address the problem.
According to him, the challenges offered a global response to the issues of international tax avoidance, tax evasion, illicit financial flows, money laundering and other harmful tax practices based cooperation and use of advanced technologies to tackle the issues.
“It is my hope that this seminar will broaden your knowledge and develop your skills on how to use AEOI tools to combat tax evasion and improve domestic revenue mobilisation in your countries,” he said.
The training is expected to enhance the effectiveness of participants who are at advance stage of AEOI implementation in their countries to increase the number and quality of outgoing requests to their treaty partners while those whose countries have not committed to the implementation of the international standard on AEOI will take steps to do so in view of the enormous benefit to be derived from it.
Earlier, the executive secretary of West Africa Tax Administration Forum (WATAF), Mr Babatunde Oladapo, said that the body was committed to contributing to the expansion of the global tax base through the exchange of information.
Oladapo said that efforts were on to close the gaps among nations to ensure the effective implementation of exchange of information and that tax administration could only be done well based on the availability of information.
He commended the OECD Global Forum for leading the drive for the automatic exchange of information to ensure that high net worth individuals and multinationals pay their taxes.
Also, the representative of the OECD Global Forum, Ervice Tchonaya, said that the organisation’s core mandate was to ensure the effective implementation of the international standard for automatic exchange of information among countries.
He said that the forum’s instruments of intervention included “Peer-review Process, Indepth Monitory System and Technical Assistance” in the area of capacity building such as trainings and seminars among others.
The seminar organised by WATAF in partnership with the OECD Global Forum had the theme: “Exchange of Information as a Tool to Combat Offshore Tax Evasion’’ and was aimed at sharing experiences and build capacity across borders.
FIRS had in August published names of 19,901 individuals and organisations, who default on tax payment in Nigeria. The list contained prominent individuals and organisations including Obasanjo Farms Nig. Ltd (Feedmill); Iyiola Omisore & Par; Citiroof Aluminium Co. Ltd; Coldstone Creamery Limited (Yaba); Davido Music Worldwide Ltd; Grand Square Supermarket and Stores Ltd; Open Heavens Bliss Enterprises; and God is Good Motors.
The agency said it had taken possession of the bank accounts of the tax defaulters, adding that the accounts would be under its possession until they regularise their tax status.
We urge FIRS to invoke Section 49 (2) (a- d) of its establishment Act which authorises the agency to proceed against and punish every officer, manager, director, secretary or any person concerned with the management of any defaulting company in like manner as if he/she had committed the offence.No tags for this post.