Yearly, Nigeria loses about $2.9 billion (about N580 billion) to tax waivers granted multinational companies, said Oxfam in Nigeria Country Director Constant Tchona.
While speaking yesterday at the launch of two reports – Fair Tax Monitor Index and the Commitment to Reducing Inequality Index in Abuja.
Tchona, made it clear that the fiscal incentives granted with the hope of stimulating investments into the country is eroded by Poor governance and lack of transparency, especially when the Central Bank of Nigeria (CBN) has confirmed that there is no cost-benefit analysis to justify the exemptions and when there is no check on the discretionary powers residing with the executive in granting exemptions.
“The procedures for granting tax incentives should undergo a thorough review, focused on transparency and governance. This should include mandatory parliamentary oversight, publication of annual tax expenditure reports, clear requirements for incentives and periodic review of expected results.”
Taxpayers, he said, often opted to negotiate with corrupt tax administration staff in return for gratifications and reduced sums.
This action, Tchona explained, is against the sanctions imposed by the Company Income Tax Act for such conduct.
He called on the Federal Government to hasten action on the new National Tax Policy (NTP) and clamp down on corporate crimes.
“Official Federal Inland Revenue Service (FIRS) numbers suggest that the entire tax system is fraught with crippling challenges of weak enforcement, corruption and outright evasion. The records show that about 30 per cent of companies in Nigeria are involved in tax evasion and also 25 per cent of registered companies in the country are not paying tax.
“Taxpayers often opt to negotiate with corrupt tax administration staff in return for gratifications and reduced sums to the coffers of the government. This is despite the sanctions imposed by the same Company Income Tax Act for such conduct,” he said.
The Oxfam chief called on the National Assembly to enact law that would criminalise the actions of banks, auditors, accountants and lawyers that facilitate illicit financial flows from the country.
the legislature is to introduce cutting-edge technology that would curb the act and also enact laws to punish enablers of tax evasion to face fines of up to 100 per cent of tax evaded.
Tchona said: “The National assembly should enact a law that will criminalise totally the actions of middlemen – banks, auditors, accountants, and lawyers that facilitate Illicit Financial Flows (IFFs). When such professionals act contrary to existing regulations, they should be held accountable in Nigeria. This can be enforced through strengthened professional association bodies.