The Federal Government has declared that Nigeria loses about 18 billion dollars annually due to profit shifting and tax avoidance practices by multinational corporations transacting business in the country.
The Minister of State for Finance, Dr Doris Uzoka-Anite, made the remark on Tuesday while speaking at the ongoing National Conference on Illicit Financial Flows organised by the Federal Inland Revenue Service, FIRS.
Lamenting the various crimes in the financial system, the minister described illicit financial flows as a hidden pipe draining the country’s national wealth.
According to her, illicit financial flows undermine revenue generation, which results in the government’s inability to provide critical infrastructure.
She said, “Illicit financial flows are not just technical problems but political, and developmental problems. It is also a national security concern. Illicit financial flow is a monster that must be eradicated.
“It is estimated that Nigeria loses about 18 billion dollars annually due to profit shifting and tax avoidance practices especially by multi-national corporations transacting in Nigeria.”
The minister revealed that a huge amount of money is usually transferred “out of this country”, stressing that such criminal acts “strip the country of the resources needed to finance much-needed public services.”
She said, “Under the Renewed Hope agenda of President Bola Tinubu, Nigeria is undergoing peaceful reforms aimed at building a resilient and self-reliant economy driven by revenue and not debt.
“For decades, Nigeria has relied on oil revenue and this is volatile and very unsustainable. The current reforms recognise the urgent need to diversify the revenue base, shifting focus from oil to non-oil sources.”
Earlier, the Executive Chairman of FIRS, Zacch Adelabu Adedeji, said there is an urgent need to safeguard the country’s national resources and “build a resilient and equitable future”, lamenting the negative impacts of illicit financial flows on the nation’s economy.
He, however, expressed confidence that under the President Bola Tinubu Hope Agenda, the country is entering “a new era of fiscal reform”.
According to him, the recent assent to four tax reform bills “signals this administration’s strong commitment to overhauling our tax system, organising the legal administration, legal framework and institutionalised transparency in revenue collection”.
“Legal reform is only a starting point, we must reinforce enforcement, optimise digital compliance and build public trust through fairness, predictability and strategic communication.
“At the FIRS, we are responding with deliberate and multidimensional strategies.
“Our goal is to forestall a culture where compliance is driven by trust and not by fear.
“We are building a tax system that is proactive, smart and secure,” the FIRS boss added.
