The Federal Inland Revenue Service (FIRS) has moved to block multinational corporations from siphoning $10 billion from Nigeria.
Over the years Nigeria has lost about $10 billion of tax through illicit profit shifting by multinational corporations operating in the country.
This money would otherwise have been applied to critical infrastructure development by the three tiers of government.
Executive Chairman (EC), Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami, made these disclosures on Friday in Abuja at the start of the Service’s 2020 Management Retreat.
Quoting the African Union Illicit Financial Flow Report, Nami said: “Africa is losing $50 billion through profit shifting by Multinational Corporations and about $10 billion of this amount is from Nigeria alone.”
To block this and other identified tax avoidance schemes by individuals and corporate organizations, Nami disclosed that he has launched a comprehensive, ongoing tax collection reform process “anchored on four cardinal pillars of rebuilding FIRS’ institutional framework; robust collaboration with stakeholders; building a customer or taxpayer-centric Institution; and making the FIRS data-centric institution.”
Nami revealed the FIRS’ revenue projecting into this year, stating that: “for the year 2020, we have a target of N8.5 trillion. This is broken down into oil tax of N3.7 trillion and non-oil taxes target of N4.8 trillion.”
Showing that the FIRS is gradually weaning Nigeria off its dependence on oil revenue, Nami disclosed that non-oil taxes “accounted for 60% contribution to the total collection” of taxes in 2019.
Speaking on the 2019 performance, the FIRS boss stated that “in 2019, the Service achieved total tax revenue collection of ₦5.26trillion against a target of ₦8.8trillion which translated to about 60% target achievement for the year.”
This performance he said “was slightly lower than the 2018 collection of ₦5.3trillion by ₦57billion or 1.07%. Oil tax collection for the year was ₦2.1trillion which was 49% achievement of its annual target of ₦4.3trillion. This accounted for 40% contribution to the total collection.”
On the other hand, non-oil taxes collection for the year was ₦3.2trillion which was 70% achievement of the annual target of ₦4.5trillion. This also accounted for 60% contribution to the total collection.
The FIRS chief assured that the Service would play its “strategic role in the nation’s political economy, including supporting the actualization of President Muhammadu Buhari’s administration’s commitment of moving the country up on the Ease of Doing Business Ranking and taking 100 million Nigerians out of poverty over the next 10 years and rebuilding Nigeria’s critical infrastructure.”
Addressing the press on the sidelines of the retreat, the Director, Communications, FIRS, Dr. Abdullahi Ismaila, noted that “the FIRS Chairman, his board and team have also set a target of improving the Service’s performance over the next four years by a “minimum target of $5 million staff-to-revenue- ratio and a 10% tax-to-GDP ratio.”