Nigeria loses $2.9bn to tax incentives
A Non-Governmental Organisation (NGO), Action Aid, on Thursday, said Nigeria lost 2.9 billion dollars annually to tax incentives to multinational companies operating in the country.
The Policy Advocacy and Campaigns Manager, Mr Tunde Aremu, stated this when he visited a member of the House of Representatives, Odeneye Kehinde (APC-Ogun) in Abuja.
He said that there was need for the National Assembly to review the laws that granted incentives to the multinational companies, adding that the legislature should also probe the processes of granting the tax incentives.
“How are these incentives negotiated? Our suspicion is that the processes of negotiating these incentives are not open.
“The companies go under the rugs to negotiate these incentives
“The Nigerian parliament should start querying the processes and demand that they should be open and transparent and that the representatives of the people should be informed when these incentives are being negotiated,'' he said.
Aremu said that although that tax avoidances were legal, “they are actually legal means of stealing money''.
He described e-trading, over invoicing, mispricing and price shifting as some of the technical terms adopted by the companies to encourage illicit financial flow from the country.
“The bulk of the money leaving Africa that we are losing contrary to impression, is not due to corruption, crime, drug trade or trade in human trafficking or other crimes
“Over 75 per cent of the money leaving Africa illicitly is actually through tax avoidance practices which unfortunately is not regarded as illegal,'' he stated.
The manager also urged the legislature to demand for the audit of the incentives, saying that such measure would check abuses of the incentives.
He called for the scrutiny of the roles played by individuals and agencies in both public and private domains in the tax incentive process.
He, however, described Nigeria as one of the safest countries to do business.
According to him, we have the largest market in Africa and one of the largest in the world, with a population of over 170 million people.
“If five per cent of the population patronizes any product, it will survive in the market.
“We need resources to put in place social infrastructure to revive roads, stabilise electricity, and to make all these possible, funds will be needed.
''But, these funds that are needed are being given out by the government as incentives,'' Aremu said
Responding, Kehinde said that there was need to review some of the joint tax agreements in Nigeria.
“There is need for urgent investigation into the Nigerian tax incentives, because if something does not benefit you, I think the best thing is to do away with such thing,'' Kehinde said. (NAN)