The Executive Chairman of the Federal Inland Revenue Service (FIRS), Babatunde Fowler is worried that several people are successfully evading tax. He disclosed that the sum of $15 billion is lost by the country to tax evasion annually.
He made the statement at an event organized by the West Africa Tax Administration Forum (WATAF)Â which held in Abuja.
The FIRS boss said, “Nigeria loses about 14 billion dollars annually if you look at the major economies, especially those in the extractive industry, South Africa, Ghana and Nigeria.
“They form bulk of the transactions, so one can safely assume that Nigeria may be losing between 14 billion dollars to 15 billion dollars annually to tax evasion.’’
[READ ALSO: FIRS establishes Tax Office for foreigners in Nigeria, intensifies compliance strategy]
Difficulties: The challenge to curb tax evasion is quite overwhelming according to Fowler. He noted that several information leaks released in the past years had helped in unveiling the depth and breadth of the challenge. Nevertheless, the increasing mobility of income and assets only helped complicate matters.
By virtue of this revelation, he noted that a huge sum of money was still untaxed due to the mobility of assets that can be stored offshore, away from the revenue service prying eyes. The FIRS boss added that the matter was becoming a global phenomenon as several governments around the world had begun to address the challenge.
The FIRS Chairman promised to respond to the global issues of international tax avoidance, tax evasion, illicit financial flows, money laundering and other harmful tax practices, using advanced technology.
As part of the efforts to combat this trend, Fowler said Nigeria is dedicated to improving transparency around tax matters by signing a declaration as well as joining the Multilateral Competent Authority Agreement (MCCA) on Automatic Exchange of Financial Account Information in 2017.
[READ ALSO: FHC faults FIRS using banks as collection agents unduly]
He also promised to fast track the implementation of the Automatic Exchange of Financial Account Information under the Common Reporting Standard (CRS) as an indication of Nigeria’s pledge to be transparent regarding the matter of tax collection.
$15billion lost to tax evasion; how much to your pockets?