FG Audits 800,000 Firms for Tax Evasion

November 6, 2017
VAT Nigeria Tax hike

By Modupe Gbadeyanka

No fewer than 800,000 firms in Nigeria have been identified by the Federal Government for matters relating to tax evasion.

Already, the firms are being audited by the government so as to adequately know the appropriate sum of their default.

Minister of Finance, Mrs Kemi Adeosun, who made this disclosure on Sunday, stated that the affected companies, including some government contractors, have never paid taxes to the appropriate authorities.

“Over 800,000 companies, including some government contractors, that have never paid taxes have already been identified and are being audited.

“This is an unprecedented initiative that entails cooperation between federal and state governments.

“The Federal Ministry of Finance has also commenced a database project that combines data from the various arms of government including bank records, property and company ownership, and customs records to create accurate profiles of those liable to pay taxes,” Mrs Adeosun said.

According to her, government has contracted the services of a private investigation firm on retainership to trace overseas assets.”

She said government is taking the issue of tax very seriously because it is what the economy needs now to grow.

According to her, “tax mobilisation risks the popularity of any government, but the present administration understands that the short term lure of political expediency must give way to the long term best interests of Africa’s largest economy.

Her energetic, young and growing population are deserving of the chance to experience a truly transformed, sustainable and growing economy,” the Minister said.

“A cursory look at the effective tax rates paid by the huge multinational and local operators, as well as the data on illicit financial flows, indicates a pattern of systematic tax evasion at all levels.

Recent statistics released by the Federal Ministry of Finance showed that Nigeria has just 14 million active tax payers from an economically active base of 70 million.

“Over 95% of these are salary earners in the formal sector, just 241 persons paid personal income taxes of N20 million (US$65,573.77) in 2016.

“Taxing the high net-worth and Nigeria’s huge community of entrepreneurs constitute a critical, but yet attainable target. The statistics for corporate tax payment shows the debilitating effects of base erosion and profit shifting as well as abuse of an overly generous tax incentive and duty waiver system.

“The historical government apathy towards revenue mobilisation is one of the effects of the mistaken identity that saw Nigeria perceive itself as an oil economy. This administration is determined to correct this identity crisis and all its concomitant effects,” she said.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

1 Comment

  1. Auditing of firms is good, however some firms are not making enough money to be classified as ‘profitable’. If you are wondering or wish to grow your business in Nigeria and across Africa, visit https://www.sellforce.org. They have a good track record.

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