The Federal Government says it has lost over $1 trillion revenue to tax evasion by multinational companies over a period of time.
Information and Culture Minister Lai Mohammed disclosed this to State House correspondents on Wednesday after the Federal Executive Council meeting presided over by President Muhammadu Buhari.
He said the FEC approved a memo for Multi-lateral Competence Agreement and the Exchange of Country by Country Report in order to give the government a better grip on its tax laws and prevent tax evasion by multinational companies.
According to him, apart from shoring up Nigeria’s finances, this is also “part of the fight against corruption and it also enhances transparency.”
He said: “Where multinational companies operate in more than one country, it’s quite easy for them to move profit from one territory to another territory where the tax law is very favourable to them. And what has happened over the years is that the revenue companies have lost a lot of money. As at the last count, over $1 trillion has been lost over a period of time. And the revenue companies have found that they were losing more money in terms of tax evasion and avoidance than what they were even receiving as grants from multinational agencies.
“So, this is a law that provides that if a company like MTN or Nestle for instance, is operating in Nigeria, not only must it file returns on its activities in Nigeria, he must also file returns on its activities in every other country that they’re doing business so that you can see from there whether there is any attempt to hide figures.”
Power, Works and Housing Minister Babatunde Fashola said the Multinational Competence Authority Agreement was in line with the government’s macro-economic policy to fund its operation and economy with more tax income “as the prices of commodities especially oil becomes more threatened.
“It would allow government to see really how much taxable revenues it has access to, especially from companies and all of that. It’s for transparency and accountability on the private side of the economy because transparency and accountability has been focusing perhaps a little more on the public side of our national life.”
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