The Federal Inland Revenue Services (FIRS) has uncovered 114 companies that claimed that they are not aware of lands allocated to them.
However, the FIRS has confirmed from the Abuja Geographical Information System (AGIS) that these lands were actually allocated to these companies and the Service has vowed to hand over these false claims to the Attorney General of the Federation for further action on the controversial lands.
These disclosure was made by the Executive Chairman of the FIRS Mr. Tunde Fowler at the African Union high level panel on illicit financial flows from Africa which held in Abuja on Thursday.
According to Fowler, “114 Companies claimed they were unaware of land allocated to them but AGIS has confirmed the ownership for all the cases referred to them and we will soon hand these cases over to the Attorney General on the way forward.”
Highlighting the benefits of curbing Illicit Financial Flows in Nigeria in particular, Fowler revealed that the “total tax debt recovered From January 2017 to 31st August 2018 is N3,631,949,050, broken down as From Nov 2016 – Dec 2017 Total collected – N1.9 Billion From Jan 2018 – Date N1.731 Billion.”
With regards to the Issuance of tax notification obligation to Company Income Tax (CIT) Non-Compliant Companies that own properties and Identified Non-Filers for Abuja, Fowler stated that it issued 2,672 Demand Notices; 653 those Now Filing and N2.983 Billion as total payments for Demand Notices for Abuja Properties
Fowler identified the Component of Illicit Financial Flows in Nigeria to include: Commercial Activities which are illegal flows from business activities that leads to hiding wealth, evading or aggressively avoiding tax, and dodging customs duties and domestic levies; Criminal activities: IFFs are often driven by criminal activities with the purpose of keeping the transactions from the view of law enforcement agencies or revenue authorities; Corruption: Money acquired through bribery and abuse of office by public officials are enormous and can be used to further develop different projects, and also increase taxation revenue collection.
Other are, nature of IFF in Nigeria Payments of expatriates staff emolument and remuneration and failure to declare for personal income tax purposes such emoluments to the relevant tax authorities in Nigeria; Laundering of funds (often sourced illegally) through Real Estates transactions to acquire property in choice locations outside Nigeria; Illegal transfer of money out of Nigeria, via unapproved channels; Mispricing of goods and services transferred between interrelated Nigeria based companies (e.g. MNEs) and Individuals to offshore based entities and individuals; Profit Shifting – for instance through excessive interest payments on foreign and locally sourced loans and Mis-invoicing of imports and exports.
Earlier, Mr Thabo Mbeki, former South African President and Chairman, United Nations Economic Commission for Africa’s High Level Panel on IFF said that Africa looses about $80 billion annually through IFFs.
Mbeki, who is also a former South African President, said the huge sums came from proceeds of commercial transactions through multinational companies, criminal activities and corruption.
According to him, illicit financial flow had posed developmental challenges on the continent, in terms of draining hard currency reserve, reduced tax collection, deepening income gap, depleting investment and weakened governance.
He harped on the need to strengthen institutions like the Revenue Service Agencies, Customs Services and the legislation, to enable them tackle better, incidences of money laundering as well as other forms of IFFs.
Meanwhile the Minister of Finance, Mrs Zainab Ahmed said that IFFs have robbed Africa of the wealth and resources needed to invest in infrastructure, education, hospitals, electricity and many other necessities for sustainable and inclusive economic development.
Ahmed was represented by the Permanent Secretary, Ministry of Finance, Mr Mahmoud Isa-Dutse.
“The quest for Africa’s economic development will be accelerated if funds illegally acquired, stolen and hidden abroad by illicit finance flow perpetrators are repatriated.
“Our development will no doubt receive a leap if Multinational Corporations desist from illicit activities of aggressive transfer pricing, base erosion, profit shifting and trade mispricing.
“As indicated in the 2015 High Level Panel Report, the challenge of combatting IFFs is particularly pronounced in countries such as Nigeria, due to the dominance of the extractive industries in the economy.
“In this regard, the work of the Nigeria Extractive Industries Transparency Initiative (NEITI), which I used to head, as well as the Federal Inland Revenue Service, whose operations the Ministry of Finance oversees, are relevant,” she said.
Ahmed also said that to address IFFs within the context of taxation, the FIRS, several years ago, introduced Transfer Pricing Regulations to curb the incidence of aggressive transfer pricing practices and enthrone the “Arms-length” Principle in the cross-border trade practices of multinational corporations, as well as indigenous firms.
In addition, she said that the Voluntary Asset and Income Declaration Scheme (VAIDS) initiative which ended in June 2018, was a tax amnesty programme aimed at raising tax revenues, regularizing the tax status of citizens and bringing concealed tax assets into the national tax base.
“Furthermore, the Federal Government is collaborating with several countries in terms of sharing information on Nigerians who own properties and bank accounts abroad.
” We also run a programme for the Automatic Exchange of Tax Information with the United Kingdom.
“In addition, we have signed agreements on the Multilateral Competent Authority on the Common Reporting Standard which is a platform for exchange of financial accounts information.
“This will come into effect as soon as the legal framework is finalized,” she said.
Ahmed also informed the panel that in July 2018, President Muhammadu Buhari signed the Nigeria Financial Intelligence Unit (NFIU) Bill into law.
She said that the NFIU would ensure autonomous and independent agency monitoring of cross-border financial flows with a view to identifying and intercepting suspicious transfers.
The Unit is also empowered to fight the funding of criminal activities, money laundering and terrorism through the international and domestic financial system.
“To aid us in our efforts, it will be appreciated if the HLP will share its experiences in domesticating international best practices in the key sectors of our economy with respect to IFFs.
“In this regard, Nigeria stands to gain much from initiatives such as the European Union’s country-by-country reporting (CbCR) transparency measures. By requiring companies that are of a particular size or operate in certain industries to publish operational and tax data for each country in which they do business.
“Governments such as ours would be better equipped to check the incidence of aggressive tax-planning strategies, adopt more targeted and risk-based tax audits, and persuade large multinational corporations to voluntarily reduce the magnitude of their tax avoidance,” she said.
Also, the Minister of Justice, Mr Abubakar Malami said that Nigeria had put in place institutions, legislations and technology expertise to minimize IFFs in the country.
“We established the EFCC, ICPC, Code of Conduct Bureau, Code of Conduct Tribunal and the Financial Intelligence Unit, and backed them with laws, to ensure that Nigeria wins the fight against corruption and IFFs.
“We have also deployed technology in this fight. For example, we have deployed BVN in the banking sector, to identify the real owners of bank accounts.
“Also, the TSA and the IPPIS were deployed to ensure that the Federal Government resources are prudently managed,” he said.
