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Nigeria charges multinationals with tax evasion
March 4, 2018, 1:14 pm
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Nigeria's campaign against tax evasion, especially by Multinational Companies (MNCs) operating in the country, was taken to the Platform for Collaboration on Tax (PCT) conference the ended on 18 February in New York.

The PCT is an initiative by the Organization for Economic Cooperation and Development (OECD), World Bank Group, International Monetary Fund (IMF) and the United Nations. Nigerian Finance Minister Kemi Adeosun who headed her country’s delegation to PCT, called on the body to make tax malpractice by MNCs across developing countries as “foreign corrupt practices”.

It is estimated that multinational tax evasions and avoidance cost Nigeria in excess of $1 trillion over a period of time. Vice President Yemi Osinbajo, at the end of the Federal Executive Council (FEC) meeting in June last year, said Nigeria lost about $178 billion to illicit financial flows in the last 10 years. The loss was also a result of tax avoidance by multinationals through tax-related treaties on profit shifting.

Conservatively, it is estimated that Nigeria has been losing no less than $850 million yearly. This represents 13 percent of the capital budget proposal in the 2018 national plan and could comfortably execute many development projects in the ministries of education, interior, health and water resources.

The theme of this year’s PCT conference was ‘Taxation and the Sustainable Development Goals (SDGs)’. It focused on the opportunities, challenges for taxation and practical aspects of tax policy and administration, and presented a platform for the minister to discuss Nigeria's tax issues and show how the nation is doubly affected by illicit financial flows due to corruption and tax evasion.

"There is absolute need for a complete understanding of how these MNCs behave in Nigeria and developing countries. Many of them operate a completely different standard in Africa, contrary to what obtains globally," Ms. Adeosun said.

She lamented that the defaulting MNCs were hiding behind slow legislative processes to perpetrate wrong activities in the countries from which they derive significant income. Adeosun said the designation of tax evasion as a foreign corrupt practice would facilitate current efforts to sue these companies in their own countries.

She commended the United Nations for putting the issue of illicit financial flows on the front burner and said the recipient nations must also take measures to discourage the flows into their countries by asking more questions.

 

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