Nigeria Loses $10bn Revenue to Multinationals—FIRS

February 10, 2020
FIRS revenue

By Adedapo Adesanya

Nigeria’s tax administration body, the Federal Inland Revenue Service (FIRS), has said that multinational corporations are costing the country about $10 billion in revenue.

This was made by the FIRS Chairman, Mr Mohammed Nami, at the service’s 2020 Management Retreat held in Abuja. However, he said his agency was putting plans in place to check tax evasion and leakages.

According to the Mr Nami, the $10 billion in leakages were through illegal profit sharing by multinationals who operate in Nigeria and this has led to a huge loss in revenue for the nation which needs enough to cater to its infrastructure needs.

Speaking at the retreat, Mr Nami said that according to the African Union Illicit Financial Flow Report, countries in African lose $50 billion through profit shifting by multinational corporations, stating that Nigeria accounts for 20 percent of this amount in the tune of $10 billion.

He said that to block this and other identified tax avoidance schemes by individuals and corporate organizations, the FIRS has launched a comprehensive, ongoing tax collection reform process.

“This is anchored on four cardinal pillars of rebuilding FIRS’ institutional framework; robust collaboration with stakeholders; building a customer or taxpayer-centric Institution; and a making the FIRS data-centric institution,” he said.

Noting that it was important for the country to move away from its dependence on oil to other non-oil revenue sources, the FIRS boss said there was a goal of improving the agency’s performance over the next four years by a minimum target of $5 million staff-to-revenue- ratio and a 10 percent tax-to-GDP ratio.

He also added that the non-oil taxes in the last year made 60 percent of its contribution to the total collection of taxes and said that this year, there was a target of N8.5 trillion, with a higher percentage from the non-oil tax targets.

“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,” he said.

The FIRS boss also reiterated that it was necessary for those who made money from the economy to pay more on taxes so as to lessen the burden on the country’s borrowing.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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