FIRS moves to block $10bn tax leakage by multinationals

FIRS moves to block $10bn tax leakage by multinationals
FIRS moves to block $10bn tax leakage by multinationals

 

FIRS moves to block $10bn tax leakage by multinationals
FIRS moves to block $10bn tax leakage by multinationals

FIRS moves to block $10bn tax leakage by multinationals

The Executive Chairman of the Federal Inland Revenue Service, Mr Muhammad Nami,  has said that the tax collection reform currently being implemented by the service under his watch will help to block about $10bn tax leakage by multinational companies.

He said this on Friday in Abuja at the opening session of the FIRS’ 2020 management retreat.

He said the reforms which were being anchored on four pillars would also help to achieve and even surpass the N8.5tn tax collection target set by the Federal Government for the agency this year.

The N8.5tn target is broken down into oil tax target of N3.7trn and non-oil taxes target of N4.8tn.

Nami gave the four cardinal pillars as rebuilding FIRS’ institutional framework; robust collaboration with stakeholders; building a customer or taxpayer-centric institution; and a making the FIRS data-centric institution.

Nami said currently, Nigeria was losing about $10bn of tax revenue through illicit profit shifting by multinational corporations operating in the country.

This amount, he noted, could have been applied to critical infrastructure development by the three tiers of government. He said the $10bn tax leakage accounts for about 20 per cent of the entire $50bn being lost by the African continent.

He said, “Looking at our performance in the recent past, one may look at the 2020 target as ambitious, but I can assure you that it is achievable especially with the ongoing reforms and business process re-engineering that are taking place in the Service.

“These reforms are aimed at improving both filing and payment compliance, re-activating dormant taxpayers through aggressive intelligence gathering and information sharing and blocking of leakages.

“In addition, if we are able to detect and block tax avoidance schemes by multinational corporations, that will also go a long way to improve our tax revenue collection.“

‘The African Union Illicit Financial Flow Report estimated that Africa is losing nearly $50bn through profit shifting by multinational corporations and about $10bn of this amount, is from Nigeria alone.’

He told participants at the event that the management team of the FIRS had also set a target of improving the service’s performance over the next four years by a minimum target of $5m staff-to-revenue- ratio and a 10 per cent tax-to-GDP ratio.

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed urged the management of FIRS to come up with an effective strategy to implement the 2019 Finance Act. She said one of the key features of the Act was the repositioning of the Small and Medium Enterprises sector adding that the government did this to support the growth of SMEs.

She urged the staff of FIRS to carry out their duties in a transparent and accountable manner adding that through this, the level of tax payers in the system would continue to increase.

The Chairman, Senate Committee on Finance Solomon Adeola, said that the senate would continue to support the service to achieve its objectives.

He said, “The Senate will not shy away from legislative interventions where necessary as well as a robust oversight of all revenue generating agencies

The President, Institute of Chartered Accountant of Nigeria, Nnamdi Okwuadigbo, described the retreat as timely as it was coming at a time when the nation was looking for a viable alternative to increasing its revenue base

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